US Antitrust Trial in Tapestry’s Bid for Capri Concludes, Awaiting Judge’s Decision

By Siddharth Cavale

NEW YORK (Reuters) – The U.S. antitrust trial concerning luxury goods maker Tapestry’s $8.5 billion bid to acquire Capri wrapped up on Monday. Tapestry’s legal team defended the acquisition against allegations that it would result in higher prices for consumers, emphasizing the "intensely competitive" nature of the handbag market.

During the trial in New York, the U.S. Federal Trade Commission (FTC) aimed to demonstrate that combining Tapestry’s brands—such as Coach, Kate Spade, and Stuart Weitzman—with Capri’s Versace, Jimmy Choo, and Michael Kors would reduce options for consumers, potentially leading to fewer and more expensive handbags.

FTC attorney Abby Dennis drew comparisons between various transport methods available for traveling from New York to Washington D.C., such as buses, trains, and planes, to illustrate the difficulties consumers face when trying to switch between handbag brands due to price. She argued that American consumers encounter similar challenges in the handbag market.

A federal judge is set to determine whether to block the merger, which was announced in August 2023, or allow it to proceed. A ruling could be expected within three weeks to three months, according to Tapestry.

"The judge has an avalanche of material to sift through and will need time to consider it. It’s not clear-cut for either side," stated James Weingarten, a former chief trial counsel for the FTC, now practicing at a law firm in Washington D.C.

Over seven days of proceedings, both parties focused heavily on defining the so-called "accessible luxury" market. The FTC brought in economist Loren Smith as an expert witness to analyze the market, while Tapestry’s attorneys questioned the financial models and methods used in this evaluation. Tapestry’s lead attorney, Lawrence Buterman, asked the judge to disregard the FTC’s analysis altogether.

"The FTC cannot meet their burden under any standard," Buterman argued during his closing remarks, urging the judge to permit the merger to go forward.