The FTC may block a planned merger between the luxury brands.
The Michael Kors Store on Rodeo Drive on Feb. 23, 2017 in Beverly Hills, Calif.The Federal Trade Commission is asking a federal judge in
to block the $8.5 billion merger of Tapestry, the company behind Coach, Kate Spade, and Capri, which controls Michael Kors.to block the sale, arguing that these brands dominate what's known as the "accessible luxury" market and that if they combined, consumers would suffer by paying higher prices. "This has to be the first time the focus of a federal court hearing turned to a $279 Kate Spade tote described as 'colorful, joyful, feminine, green and white seen on Emily in Paris," Senior investigative reporter and correspondent Aaron Katersky said on "Good Morning America," on Tuesday.Fg/bauer-griffin/GC Images via Getty Images, FILE
Tapestry argues the FTC is ignoring the reality of a marketplace, in which consumers have a lot of choices, suggesting it takes a mere stroll through Bloomingdale's or Macy's to see Gucci, Kors and Calvin Klein bags fighting for attention. Michael Kors himself testified last month during a hearing, telling the judge there's already plenty of competition for handbags, noting that he learned about one brand when he saw a photo of pop superstarKors also testified his handbags have "reached a point of brand fatigue" and a lawyer arguing in favor of the merger said it would revitalize the Michael Kors brand, so consumers have yet another choice. The goal, he said, is to sell more handbags to consumers.
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