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New York Fashion Week isn’t the only major fashion event happening this month. On Monday, fashion icon Michael Kors testified in an antitrust trial in Manhattan as a Federal Trade Commission lawsuit filed in April that seeks to block Tapestry’s $8.5 billion acquisition of Capri Holdings.
The deal, if approved, would place six major fashion brands under one company: Tapestry’s Coach, Kate Spade, and Stuart Weitzman; and Capri’s Versace, Jimmy Choo, and Michael Kors. The FTC argues this deal would “eliminate direct head-to-head competition between Tapestry’s and Capri’s brands” and give Tapestry a “dominant share” of the accessible luxury handbag market—or bags made from quality leader and craftsmanship offered at a more affordable price.
“With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.
“This deal threatens to deprive consumers of the competition for affordable handbags, while hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions.” The FTC declined to comment further on the matter when asked by Fortune, and Tapestry did not respond to a request for comment.
In other words, the FTC thinks if the acquisition is successful, it would create a massive company with the power to unfairly raise prices for consumers.
