A Judge Just Blocked the $8.5 Billion Merger of Coach and Versace’s Parent CompaniesOn Thursday, a judge blocked the merger of Tapestry and Capri Holdings, two companies that oversee a number of accessories brands,. The $8.5 billion merger was announced last year, but Judge Jennifer Rochon of the Southern District of New York has ruled that it would lead to higher prices for consumers.
The merger “likely will substantially lessen competition in the market for accessible-luxury handbags, in violation of Section 7 of the Clayton Act,” Rochon wrote., and Jimmy Choo. By combining the two companies, the merger would make them more competitive with major luxury conglomerates like LVMH andwrote, and the trial started in September.
“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,” the spokesperson said. “We face competitive pressures from both lower- and higher-priced products and continue to believe this transaction is pro-competitive and pro-consumer.”
If the merger were to eventually go through, the combined Tapestry and Capri would control a whopping 59 percent of the “accessible luxury” handbag market, Rochon wrote in her decision. Following that decision, shares in Capri plummeted 51 percent, while shares in Tapestry rose more than 12 percent.in the past few months, with many companies releasing poor sales and profit results. They aren’t immune to that trend either: Revenue at Capri fell 13.2 percent year over year in August, thenoted.
From a Tom Colicchio Dinner to a Rare Cartier Bowl: 7 Stellar New Drops From The Vault by Robb Report