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The Federal Commerce Fee is suing to dam Tapestry’s $8.5 billion acquisition of Capri Holdings, saying the deal would hurt customers by lowering competitors and elevating costs within the reasonably priced luxurious sector.

Monday’s federal court docket submitting by the FTC challenges the proposed deal that may have one firm controlling six style manufacturers: Tapestry’s Coach, Kate Spade and Stuart Weitzman and Capri’s Michael Kors, Versace and Jimmy Choo.

The acquisition might have a destructive impression on the hundreds of thousands of American customers who now profit from the head-to-head rivalry between Tapestry and Capri, in addition to on the roughly 33,000 employees employed by each corporations worldwide, the FTC said.

“With the objective to develop into a serial acquirer, Tapestry seeks to accumulate Capri to additional entrench its stronghold within the style business,” Henry Liu, director of the FTC’s Bureau of Competitors, said. “This deal threatens to deprive customers of the competitors for reasonably priced purses, whereas hourly employees stand to lose the advantages of upper wages and extra favorable office circumstances.”

Tapestry rejected the FTC’s stance, saying the company doesn’t perceive both {the marketplace} or the way in which individuals store.

“The underside line is that Tapestry and Capri face aggressive pressures from each lower- and higher-priced merchandise. In bringing this case, the FTC has chosen to disregard the fact of at this time’s dynamic and increasing $200 billion world luxurious business,” the corporate stated in a press release.

Tapestry stated it could purchase Capri in August of 2023. The businesses collectively generated greater than $12 billion in gross sales in 2022. 

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