Competition Judge blocks merger of Coach and Michael Kors

The companies behind well-known fashion brands such as Michael Kors, Versace and Coach want to merge. But a US court has stopped them for the time being. It's all about higher handbag prices.

The billion-euro deal to bring well-known fashion brands such as Coach, Michael Kors and Versace under one roof is on ice for the time being. A New York judge blocked the merger with a temporary injunction at the request of the US government.

The merger, worth around 8.5 billion US dollars, was announced in August 2023. The US group Tapestry, which owns the Coach, Kate Spade and Stuart Weitzman brands, wants to buy the holding company Capri, which controls Michael Kors, Versace and Jimmy Choo.

The US regulatory authority, the FTC, took the case to court, arguing that the merger could lead to higher prices, particularly for handbags and accessories. The judge considered it entirely plausible that the merger would lead to less competition in the market for "affordable luxury bags" - and therefore decided in favor of the injunction. She considered the companies' warnings that the move would lead to the failure of the deal to be unfounded. Tapestry and Capri announced that they would appeal against the decision.

Capri shares fell by more than 45 percent at the start of pre-market US trading.

SDA