Muhamad Ilyas’ Post

The US Federal Trade Commission (FTC) has sued to block Tapestry’s (parent company of Coach and Kate Spade) $8.5 billion acquisition of Capri Holdings Limited (a global fashion luxury group consisting of Jimmy Choo, Michael Kors and Versace). How would the proposed deal impact global luxury retail competition and consumer choice? Coresight Research explores the merger’s implications and considers the FTC’s claims, leveraging proprietary US consumer survey analysis. #tapestry #capri #ftc #federaltradecommission

𝗙𝗧𝗖 𝗕𝗹𝗼𝗰𝗸𝘀 𝗧𝗮𝗽𝗲𝘀𝘁𝗿𝘆-𝗖𝗮𝗽𝗿𝗶 𝗠𝗲𝗿𝗴𝗲𝗿: 𝗔 𝗧𝘂𝗿𝗻𝗶𝗻𝗴 𝗣𝗼𝗶𝗻𝘁 𝗳𝗼𝗿 𝗠&𝗔 𝗶𝗻 𝗔𝗰𝗰𝗲𝘀𝘀𝗶𝗯𝗹𝗲 𝗟𝘂𝘅𝘂𝗿𝘆 The recent judicial decision to block Tapestry’s acquisition of Capri has significant implications for the M&A landscape, particularly within the accessible luxury market. The $8.5 billion deal aimed to create a U.S.-based conglomerate mirroring European luxury giants like LVMH, combining Coach, Kate Spade, Michael Kors, and Versace. However, the Federal Trade Commission (FTC), supported by the court, argued that merging two close competitors would consolidate market share, ultimately driving up prices for budget-conscious consumers. Judge Jennifer Rochon highlighted that the merger could lead Tapestry to control 59% of the accessible luxury handbag sector, a substantial market share that limits competition. The FTC emphasized that with accessible luxury brands already under inflationary pressures, a merged entity could more easily raise prices without risking significant customer loss, potentially costing consumers an estimated $365 million. Beyond antitrust concerns, the ruling underscores an aggressive FTC stance on competitive practices. Under Chair Lina Khan, the FTC is intensifying scrutiny on deals perceived as anti-competitive, even in traditionally less-regulated sectors like fashion. This case could set a precedent, signaling to M&A stakeholders in both luxury and other consumer-focused industries the need for a broader risk assessment, particularly where brand equity and pricing strategy intersect. For Tapestry and Capri, this decision may necessitate a strategic pivot. Capri’s Michael Kors brand, struggling to regain market share, will likely require substantial investment to revitalize its brand independently. Tapestry, meanwhile, faces pressure to refocus on organic growth and brand optimization, especially given recent sales declines in its Stuart Weitzman and Kate Spade brands. The ruling’s impact reverberates through luxury retail, illustrating the delicate balance between consolidation benefits and regulatory oversight. #Coach #MichaelKors #FTC #MergersAndAcquisitions #LuxuryMarket #Antitrust #FashionBusiness

US sues to block merger of Coach and Michael Kors handbag makers 👜 The US Federal Trade Commission has sued to block Coach parent Tapestry's $8.5bn deal to buy Michael Kors owner Capri saying it would eliminate "direct head-to-head competition" between the flagship brands of the two luxury handbag makers. It is unusual for the US regulator to try to block a high-end fashion merger. But in December, authorities issued new merger guidelines to encourage fair, open, and competitive markets. By using a new tactic under the guidelines, the FTC has argued that the merger of Tapestry and Capri would directly affect hourly workers who may lose out on higher wages due to reduced competition for employees. Tapestry had offered to buy Capri in August, hoping to create a US fashion behemoth that could effectively battle bigger European rivals such as Louis Vuitton parent LVMH and potentially win more share in the global luxury market. Sources: BBC, Reuters #Fashion #Finance #MergersandAcquisitions #Deals

Ever wondered who's behind Bluestone? Accel India is the second largest shareholder in BlueStone, holding a 12.25% stake in the company on a fully diluted basis. Gaurav Singh Kushwaha, the founder and CEO of BlueStone, is the largest shareholder with a 17.81% stake in the company👇 BlueStone is an omnichannel jewellery company that offers more than 8,000 designs across rings, pendants, earrings and other products, It competes with the likes of CaratLane, GIVA, and other legacy jewellery brands. #BluestoneOwnership #Bluestone #CaratLane #ShareholdingStructure #Business #founder #CEO

Matchesfashion, purchased by Frasers Group for £52m three months ago, is entering administration due to persistent missed targets and financial losses. Frasers cited the need for extensive restructuring, with funding requirements beyond viability. The move puts about 500 Matches staff jobs at risk. Frasers, committed to high-end retail, had aimed to strengthen its luxury offering through the acquisition. Matches, founded in 1987, was sold for £400m in 2017. Financial challenges reflect a broader luxury goods market slowdown. #Matchesfashion #FinanicalChallenges #LuxurRetail #Thesocialtalks.

I was quoted in this article on the FTC trying to block the merger between Tapestry and Capri. What I find interesting is that, like me, most of the other people quoted find the ruling incredulous. This includes an executive from a competitor brand, who admitted that while they should be happy about the attempt to block, they actually think the FTC is anachronistic and has no understanding of how the market works. I go further. I think the FTC has become a menace. It is attacking the companies that generate wealth and make the country stronger. It does so under the camouflage of 'protecting consumers' but, in reality, the only thing it's protecting in this instance is its own warped worldview. Thanks to WWD for including my thoughts alongside many other interesting musings... https://lnkd.in/e-qqm_z6 #retail #retailnews #luxury #handbags #FTC #competition

Frasers Group's £83 Million Mulberry Bid Rejected Mike Ashley's Frasers Group has made an £83 million offer to acquire Mulberry, a luxury handbag brand currently grappling with significant financial challenges. Highlights. Offer: £83 million at 130p per share. Rejection: Mulberry's board believes the bid undervalues the brand. Losses: Mulberry reported a £34.1 million loss, with revenues down 18%. Future Concerns: Growing doubts about Mulberry's survival. Founder’s View: Roger Saul suggests a fit with LVMH, not Frasers. Why It Matters: Frasers aims to avoid a Debenhams-like collapse. With mounting challenges in the luxury market, what’s next for Mulberry? Read more: https://lnkd.in/gx3KF53F #FrasersGroup #Mulberry #LuxuryFashion #Law #M&A

The Tapestry and Capri Holdings merger has drawn significant attention, particularly from the Federal Trade Commission (FTC), due to concerns over competition. The FTC argues that this could lead to reduced competition, particularly in the "accessible luxury" market for handbags, potentially resulting in higher prices for consumers and lower wages for employees. Despite these concerns, it's important to note that while the combined entity would generate close to $8 billion in annual revenues, this wouldn’t dramatically alter its standing in the global luxury landscape. Tapestry and Capri would inch closer to U.S.-based PVH Corp., but still trail far behind European giants like LVMH and Kering, who dominate the industry with far larger revenues. So, while the merger could give the companies a stronger foothold in certain product categories, especially in the U.S., it won’t fundamentally change the balance of power within the global luxury market. The real impact may be seen in the more competitive mid-luxury segment, but claims of a transformative industry shift seem overblown. #TapestryInc #CapriHoldings #LuxuryFashion #MergersAndAcquisitions #AccessibleLuxury #FashionIndustry #LuxuryRetail #FashionBusiness #FTC #LuxuryBrands

The U.S. District Court has blocked Tapestry’s $8.5B purchase of Capri Holdings Limited due to competition issues in the luxury handbag market. The ruling highlighted that the merger would result in a company holding 59% of the accessible luxury handbag market, raising concerns about the potential loss of direct competition. Tapestry and Capri are now planning to appeal. This merger would have brought together some iconic brands, including Tapestry’s Coach, Kate Spade, and Stuart Weitzman, alongside Capri’s Versace, Jimmy Choo, and Michael Kors. This situation highlights the increasing regulatory scrutiny in the current M&A market, especially within the luxury consumer goods sector. It’ll be interesting to see how regulatory environment on M&A changes / or doesn’t change with next week’s Presidential election. #MergersAndAcquisitions #LuxuryGoods #Tapestry #CapriHoldings

STYLE CAPITAL SGR S.p.A., a distinguished Italian private equity firm recognised for its significant accomplishments with Golden Goose, has acquired a 50.2% ownership stake in Autry International, the brand renowned for its signature #Autry sneakers. Major features of this acquisition include: Significant Revenue Growth: Autry experienced a remarkable increase in revenue, rising from €3 million in 2020 to €110 million in 2023. International Expansion Plans: The company aims to open over 20 new stores in premium retail locations in Italy and other countries. E-commerce enhancement: A strengthened commitment to enhancing Autry’s digital footprint and boosting online sales capabilities. Global distribution focus: Consolidating international wholesale efforts to increase market presence. Autry is poised to become a leader in the luxury sneaker industry by leveraging the expertise of Style Capital. The company aims to develop an engaging brand story, increase brand visibility, and promote continuous product innovation. #Autry #Acquisition #Business #Fashion #FashionIndustry #SneakerCulture #PrivateEquity #BrandGrowth #Sneakers #GoldenGoose