The FTC, which voted unanimously to block the deal, simultaneously filed complaints in its in-house and federal courts on Monday. The agency also alleged that the merger would likely harm the companies’ 33,000 workers since Tapestry and Capri often compete for employees.
Despite the pressure from the agency, the companies want to continue to fight for the takeover. Tapestry argues that both companies operate in an intensely competitive and highly fragmented industry alongside hundreds of rival brands, and that it will work to close the transaction this calendar year.
Tapestry CEO Joanne Crevoiserat spearheaded the company’s acquisition of Capri last year with the aim of creating a US-based fashion conglomerate to expand market share in what’s known as the accessible luxury sector. The proposed acquisition, announced in August, capped a decade or so of rivalry between Coach and Michael Kors to dominate the US handbag market.
Tapestry owns Coach, Kate Spade and Stuart Weitzman; Capri controls labels Michael Kors, Versace and Jimmy Choo.
