US antitrust trial in Tapestry bid for Capri ends, judge’s decision awaited By Reuters

By Siddharth Cavale

NEW YORK (Reuters) – U.S. antitrust litigation over luxury goods maker Tapestry’s (NYSE: ) $8.5 billion bid to buy Capri ended on Monday, with Tapestry’s lawyers citing an “intensely competitive” handbag market to defend against claims that consumers would face higher prices.

At the trial in New York, the US Federal Trade Commission sought to demonstrate in its closing arguments that the agreement to bring six brands – Tapestry’s Coach Kate Spade and Stuart Weitzman with Versace de Capri, Jimmy Choo and Michael Kors—in one company would leave shoppers with fewer and more expensive handbags than if the companies were separate.

FTC attorney Abby Dennis tried to draw parallels between the multiple methods of transportation to get to Washington DC from New York – such as buses, trains, planes and even helicopters – but how difficult it is for consumers to switch these options from because of price limitations. She said Americans face the same challenges with handbags.

A US federal judge will decide whether to block the merger, which was announced in August 2023, or allow it to go ahead. A decision could be expected anywhere between three weeks and three months, according to Tapestry.

“The judge … has an avalanche of material thrown at her and she needs some time to think about it. You can’t say this is in the bag for either side,” said James Weingarten (NYSE: ), a former FTC. chief trial counsel, now working in Washington DC at the Milbank law firm.

During seven days of trial proceedings, lawyers for both sides spent considerable time focusing on defining the so-called “affordable luxury” market. While the FTC relied on an expert witness, economist Loren Smith, to assess the market, Tapestry’s lawyers poked holes in the financial modeling and methodology used to define the market. Tapestry’s lead counsel, Lawrence Buterman, asked the judge Monday to disregard the analysis entirely.

“The FTC cannot meet its task under any standard,” Buterman said in closing, asking the judge to allow the merger to proceed.