F.T.C. Sues to Block $8.5 Billion Fashion Merger

The Federal Trade Commission on Monday sued to block Tapestry’s $8.5 billion acquisition of Capri, a blockbuster fashion tie-up that would bring together Coach, Kate Spade, Michael Kors and Versace.

The lawsuit is a rare move by the agency to block a fashion deal, given that the industry does not suffer from a lack of competition. In her nearly three years as chair of the F.T.C., Lina Khan has put a priority on taking on the power of big business in suits across industries. The agency has moved to block the supermarket merger between Kroger and Albertsons, Meta’s acquisition of the virtual reality start-up Within and Microsoft’s bid for the gaming giant Activision.

The results have been mixed: The F.T.C. failed to block Microsoft’s deal and Meta’s acquisition, both of which closed last year.

“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 F.T.C.’s Bureau of Competition, said in a statement.

At the center of the F.TC’s concerns are “accessible luxury” accessories — an industry term for the less expensive wares sold by Coach, Kate Spade and Michael Kors. The agency said tens of millions of Americans could end up paying more for these items because the combined company would no longer have the incentive to compete on price.

“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,” Mr. Liu said.

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