Why the FTC's attempt to block the Tapestry-Capri deal sets a dangerous precedent

In a move aimed at protecting the American consumer, the Federal Trade Commission has sued to block the proposed merger of Capri, the parent company of brands such as Michael Kors , Jimmy Choo and Versace , and Tapestry, which owns Coach and Kate Spade , among other brands.

If Kate Spade, Coach and Michael Kors raise prices to capture more of the luxury market, they may find themselves competing with brands such as Frame or other more luxury or directional brands. The bottom line is that there are just too many accessory brands out there for the combined entity to be able to dictate prices or options to consumers.Another argument where the FTC gets it wrong is the claim that removing products from department stores or other multibrand retailers harms the consumer.

The same goes for Coach in the present market. If it were available everywhere at a bargain basement price, then it would not be special and it would not be considered accessible luxury. What this suggests is that the FTC does not see or acknowledge the switching behavior of the vast majority of consumers, as most shoppers mix and match high and low fashion — for example, luxury handbags with a J.Crew T-shirt and Frame jeans.

The FTC is looking at the effect that large, multibillion-dollar industry players may have on the market and uses the example of Rebecca Minkoff as to why new entrants to the marketplace may not be sufficient.

Featured Government Industry Sectors Legal And Privacy Opinion Aml Law Group Chanel Coach Ftc Government Hermes Jimmy Choo Jonathan Lazarow Kate Spade Legal And Privacy Luxury Luxury Daily Luxury Marketing Luxury News Michael Kors Rebecca Minkoff Stuart Weitzman Tapestry Capri Merger Tapestry-Capri Tory Burch Versace

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