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The
FTC argues the merger announced in August 2023 would eliminate
head-to-head competition between Tapestry's Coach and Kate Spade
brands and Capri's Michael Kors' brands, which has resulted in
better prices, discounts and promotions for consumers and wages
and workplace benefits for employees.
The deal would also give Tapestry a dominant share of the
"accessible luxury" handbag market, a term coined by Tapestry to
describe quality leather and craftsmanship handbags at an
affordable price, the FTC said in its April lawsuit.
Tapestry, in response, argues that the FTC's analysis
misunderstands the handbag marketplace and the way consumers
shop, and that "accessible luxury" is a notional concept. The
U.S. handbag market, they say, is highly fragmented and
competitive with low barriers to entry and fickle consumer
tastes.
The FTC has sued to block several mergers over the past year,
making for a busy schedule.
The antitrust regulator is currently fighting to block
supermarket chain Kroger's acquisition of Albertsons in a
federal court in Portland, Oregon and has also sued to block the
$4 billion acquisition of Mattress Firm by mattress manufacturer
Tempur Sealy International.
Monday's trial, overseen by District Court Judge Jennifer Rochon
for the Southern District of New York, is expected to last for a
week and a half.
The brands are likely to call Jeff Gennette, the former CEO of
Macy's, to testify about the range of handbag choices available
to shoppers, while the FTC is expected to offer evidence about
the physical similarities between each company's bags and how
Americans respond to changes in handbag prices.
The trial follows the merger's approval by antitrust regulators
in Japan and the European Union earlier this year.
(Reporting by Siddharth Cavale in New York; editing by Diane
Craft)
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