US watchdog sues to block $8.5bn handbag takeover 23 April 2024

US watchdog sues to block $8.5bn handbag takeover 23 April 2024

By fijivillage
Tuesday 07/05/2024
Tapestry owns handbag brands including Coach and Kate Spade

The US competition watchdog has sued to block fashion accessory giant Tapestry's $8.5bn (£6.9bn) takeover of rival Capri.

Tapestry owns handbag makers including Coach and Kate Spade, while Capri's brands include Michael Kors.

The US Federal Trade Commission (FTC) said if allowed, "the deal would eliminate direct head-to-head competition between Tapestry’s and Capri’s brands".

In response Tapestry said "the FTC fundamentally misunderstands both the marketplace and the way in which consumers shop".

Together, the firms employ about 33,000 staff globally but the FTC argued the deal could reduce wages and their benefits.

Coach and Kate Spade are known for what their parent firm calls "accessible luxury" handbags - quality leather and craftsmanship products at affordable prices.

Tapestry offered to buy Capri in August, hoping to create a US fashion giant that could compete against bigger European rivals such as Chanel, Hermes and Louis Vuitton parent LVMH.

The FTC requested more information on the deal in November.

Announcing its decision to take legal action, the FTC said the deal would give Tapestry a dominant share of the market.

Tapestry said in a statement that "in bringing this case, the FTC has chosen to ignore the reality of today’s dynamic and expanding $200 billion global luxury industry".

Capri, which also owns Versace and Jimmy Choo, said "this transaction will not limit, reduce, or constrain competition" as the two firms "operate in the fiercely competitive and highly fragmented global luxury industry".

It is unusual for the US regulator to try to block a high-end fashion merger.

But in December, authorities issued new merger guidelines to encourage fair, open and competitive markets.

By using a new tactic under the guidelines, the FTC has argued that the merger of Tapestry and Capri would directly affect hourly workers who may lose out on higher wages due to reduced competition for employees.

Earlier this month, the companies received regulatory clearance for the deal from the European Union and Japan.

The two companies need to close the deal by 10 August.

Source : BBC

FEATURE NEWS
Huge delay in review of electoral laws – SOE
Supervisor of Elections, Ana Mataiciwa says they have not received any update from the former Attorney General, Siromi Turaga and the Solicitor Gener...
13 hours ago
LATEST NEWS
Increase pay for jobs where there are more women – Dr Bhim
Pay should be increased for those jobs where women are a majority, for example, nurses and teachers. This has been highlighted by FNU lecturer, ...
12 hours ago

Robust enforcement operations and road safety education results in road fatalities decreasing by 45% - Ro Filipe
The robust enforcement operations and comprehensive road safety education and awareness campaigns over the past few months have seen a substantial ...
13 hours ago

NFA investigates 3 fires in the last two days
National Fire Authority investigators have started looking into three fires in the past two days, with one incident Monday resulting in the death of ...
13 hours ago

Students share ideas to combat ocean pollution during Veivueti Kids Ocean Conference
As Fiji is experiencing the impacts of climate change, school children are now taking a step toward conducting awareness and conferences where they ...
15 hours ago

US citizen dies on board Fiji Airways flight to San Francisco
A 41-year-old man from Unites States of America passed away on a flight from Nadi to San Francisco on Sunday morning due to a medical ...
16 hours ago



fijivillage Straight Talk with Vijay Narayan
Latest Videos

Stay tuned for the latest news on our radio stations

CFL radio frequencies
yb
IN DEPTH
Pre-Budget 2024-2025
2023-2024 National Budget Address2023-2024 Budget Supplement2023-2024 Budget ...
16 hours ago

Crisis within FijiFirst relating to the termination of 17 MPs who voted for salary increases
A crisis has erupted within the FijiFirst party relating to the termination of 17 members of parliament who supported the government's motion to ...
2 days ago

Sayed-Khaiyum case on alleged payment of Saneem's taxes without proper approval
It is alleged that between the 30th of June, 2022 and the 12th of July, 2022 in Suva, whilst being employed in the civil service as the Acting Prime ...
2 days ago

TOP