Blockbuster Handbag Merger Halted: FTC Triumphs in Major Trade Case

A U.S. judge blocked the $8.5 billion merger between Tapestry and Capri, marking a major victory for the Federal Trade Commission. The ruling prevents the merger of the two top U.S. handbag makers, potentially raising consumer costs, and impacts the competitive landscape in accessible luxury fashion.

A United States judge has blocked the proposed $8.5 billion merger between major handbag makers Tapestry and Capri, handing a significant victory to the Federal Trade Commission. The ruling challenges the creation of a dominant player in the U.S. handbag market, a potential threat to competition and consumer prices.

The decision came ahead of the presidential election, where surging consumer prices are a critical voter concern. The FTC successfully argued that the merger would stifle competition and could lead to unfair pricing practices. The ruling caused a significant market reaction, with Capri shares plummeting and Tapestry shares increasing.

Tapestry plans to appeal against the decision, advocating the merger's competitive advantages. The ruling also highlights the complexities of defining 'affordable luxury' in the fashion industry and the challenges of merging in an already highly competitive market.

(With inputs from agencies.)