Tapestry/Capri Merger Put on Hold

A federal judge has upheld the Federal Trade Commission’s decision to halt the planned merger of Tapestry Inc. (New York) and Capri Holdings (London). In the immediate aftermath of that event, both luxury retailers issued statements declaring their intention to appeal it.

Capri Holdings is a fashion luxury group consisting of Versace, Jimmy Choo and Michael Kors, while Tapestry consists of Coach, kate spade new york and Stuart Weitzman.

The ruling by the U.S. District Court in the Southern District of New York granted the FTC’s request for a preliminary injunction halting the proposed $8.5 billion merger, which was first announced last year but stalled after the FTC sued to block it for anti-competitive reasons — especially when it comes to offering consumers affordable handbags.

In its release, Tapestry said the court’s decision granting the FTC’s request for a preliminary injunction “is disappointing and, we believe, incorrect on the law and the facts. Tapestry and Capri operate in an industry that is intensely competitive and dynamic, constantly expanding and highly fragmented among both established players and new entrants. We face competitive pressures from both lower- and higher-priced products and continue to believe this transaction is pro-competitive and pro-consumer. We intend to appeal the decision, consistent with our obligations under the merger agreement.”