Just like J.Lo and Ben Affleck in 2003, two glamorous names have called off their ludicrously pricey, hotly anticipated wedding.
What happened: In high fashion, companies build up through consolidation. The future of that strategy is now in doubt after Capri Holdings and Tapestry, the two largest U.S. luxury houses, called off their US$8.5 billion merger after a successful U.S. Federal Trade Commission (FTC) suit.
- The deal would have united brands like Kate Spade and Michael Kors, but the FTC argued it would lead to higher prices and lower-quality products in the “accessible luxury” market. It sued to block the deal, with the court ruling in its favour last month.
- Capri and Tapestry gave up on appealing the ruling as any court decision would inevitably have come after the deal’s mandatory February 2025 completion deadline.
Why it matters: Experts believe it’s the first major antitrust case for luxury fashion, per the Financial Times. The results give a precedent for blocking mergers in a sector that’s used to seeing behemoths like LVMH and Kering amass empires through unchallenged acquisitions.
Bottom line: This could all depend on whether both U.S. and European antitrust regulators keep on pursuing aggressive antitrust lawsuits after changes to leadership.—QH