A federal judge granted the FTC’s motion to block the merger between Tapestry and Capri Holdings.
Versace’s parent company, Capri Holdings, suffered a steep loss in after-hours trading on Thursday after a federal judge blocked its proposed merger with Tapestry, the parent of fashion brands Kate Spade and Coach.
Jennifer Rochon, a judge in the Southern District of New York, granted the Federal Trade Commission’s request for a preliminary injunction to halt the merger of the two companies while the commission investigates the deal.
Rochon wrote that the FTC argued in its case that the merger would «substantially lessen competition in the market for accessible-luxury handbags.»
Rochon ruled in favor of the FTC’s stance, writing in her ruling that the «merging parties are close competitors, such that the merger would result in the loss of head-to-head competition.»
«The Court thus finds that there is persuasive additional evidence of unilateral effects of the merger causing anticompetitive harm», Rochon wrote.
Following the court order, Capri’s stock was down 45% in after-hours trading on Thursday.
