FTC sues to block Coach parent Tapestry's acquisition of Capri Holdings

The U.S. Federal Trade Commission has filed a lawsuit to block the $8.5 billion acquisition of Capri Holdings by Coach and Kate Spade’s parent company, Tapestry. This move temporarily halts a deal that would combine Tapestry’s Coach, Kate Spade, and Stuart Weitzman with Capri’s Versace, Jimmy Choo, and Michael Kors. The merger aims to enhance competition with European luxury brands. The approval of U.S. officials is still pending, though Tapestry has received clearance from regulators in Europe and Japan. Both Tapestry and Capri have faced challenges due to consumer spending habits, with Capri being more affected due to its reliance on wholesale retailers. Tapestry, led by CEO Joanne Crevoiserat, has focused on strengthening Coach’s brand and attracting younger consumers. Tapestry’s sales are primarily through its own channels rather than wholesale. Shares of Tapestry have risen this year, while Capri’s stock has fallen.