A US court blocked the acquisition of Capri Holdings, controlling group Versace, And Tapestry, which would have created a fashion giant worth over 8.5 billion euros. The appeal was presented by the FTC, the Federal Trade Commission, which deals with antitrust in the United States.
The decision had opposite effects on the two groups involved. Capri Holdings collapsed on the stock market, with its shares dropping in value by 45%. Tapestry, on the other hand, grew by 16%, but announced that it will appeal against the decision court.
The acquisition of Capri Holdings blocked, Versace collapses on the stock market
The federal courthouse in Manhattan, State of New York, accepted the US Competition Authority’s appeal against the merger of Tapestry Inc. and Capri Holdings. The operation, intended to create a fashion giant worth 8.5 billion dollars that would also control the Italian brand Versace, was therefore blocked.
The reasoning behind the ruling speaks of a danger to competition in the affordable luxury handbag sector, where both groups operate, often importing products from China. There Ftc calculated that the merger between Capri and Tapestry it would create a group that controls 59% of this market. Tapestry immediately protested this decision and announced that it will appeal.
“Tapestry and Capri operate in an intensely competitive and dynamic sectorcontinuously expanding and highly fragmented between both established operators and new operators” reads the press release from the US group.
On the stock market, the two companies reacted in diametrically opposite ways. The Capri Holdings stock is reported to be at a loss 45% in pre-marketshare trades that occur before the official opening of the stock exchange. Both securities are in fact listed in the USA. Tapestry, on the other hand, recorded growth of around 16% in the pre-market.
The merger between Tapestry and Capri Holdings
The American Tapestry group is an important fashion holding company. It has a turnover of over 2.2 billion dollars and a profit of 856 million dollars. It mainly controls three major brands, Coach New York, Kate Spade New York and Stuart Weitzman. Capri Holdings, on the other hand, is a British company based in the Virgin Islands, founded in 1981 by the American designer Michael Kors. In 2018 it acquired the Versace brand from Blackstone. It has a turnover of over 5.5 billion a year and is therefore larger than Tapestry.
Despite this, it was Tapestry in 2023 that attempted to acquire Capri Holdings for 8.5 billion dollars. In April, however, the operation was blocked by the FTC through an appeal which was then upheld on October 25 by the federal court in Manhattan which, at least for the moment, put an end to the operation.
The fate of the Italian brand remains in the balance Versace. Before the acquisition was blocked, its sale by the new group seemed likely. However, the operation was completely cancelled, unless there was a completely opposite outcome during the appeal, so it is not clear what Versace’s position could be in the near future.
