U.S. sues to block merger of Coach and Michael Kors handbag makers

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The U.S. Federal Trade Commission on Monday sued to block Coach parent Tapestry's US$8.5 billion deal to buy Michael Kors owner Capri, saying it would eliminate 'direct head-to-head competition' between the flagship brands of the two luxury handbag makers.

People pass displays of Coach handbags as they walk through the lobby of 10 Hudson Yards, Tuesday, May 31, 2016, in New York. The U.S. Federal Trade Commission on Monday sued to block Coach parent Tapestry's US$8.5 billion deal to buy Michael Kors owner Capri, saying it would eliminate "direct head-to-head competition" between the flagship brands of the two luxury handbag makers.

"The FTC's decision to sue is surprising because there's no shortage of competition for fashion, apparel and accessories. The commission has latched onto a marketing term - 'accessible luxury' - and treats it like a unique market that exists in a vacuum," said Howard Hogan, chair of the fashion, retail and consumer practice at law firm Gibson Dunn.U.S. antitrust enforcers issued new merger guidelines in December to encourage fair, open and competitive markets.

Earlier in April, the companies received regulatory clearance from the European Union and Japan for their deal, that would bring top luxury labels such as Kate Spade and Jimmy Choo under one roof. Authorities on both sides of the Canada-U.S. border resumed search efforts Monday to find two men who went missing while kayaking off Vancouver Island over the weekend.Toronto cop cleared in crash that seriously injured 2 people, but SIU raises concerns about officer's speed

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