by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Sept 9 – At the hearing on the US Federal Trade Commission's bid to enjoin the merger of Tapestry and Capri started up before U.S. District Court for the Southern District of New York Judge Jennifer L. Rochon, Inner City Press was there, thread here, more on X for Subscribers here and Substack here
FTC lawyer: There is an accessible luxurt market, according to Tapestry own internal documents. The 2023 DOJ Merger Guidelines uses HHI or the Philadelphia National Bank. This proposal violates both, and would have violated the 2010 Merger Guidelines.
FTC lawyer: The court will hear from Mr Kors himself. Michael Kors is not a failing brand. Tapestry wants its data - it would scramble the eggs. This merger would harm working class and middle class women
Tapestry's lawyer: Anyone with a smart phone knows the FTC theory is wrong. There are hundreds of brands of handbags, from NYC to Des Moines. Antitrust is not about the FTC's theories, but consumers
Tapestry's lawyer: Women have in their ckosets Gucci, Coach and Calvin Klein bags... We had to fend off a Trader Joe's tote bag. Then there are the pre-owned bags. Here's a bag that looks like Croks, they sell it in Dick's Sporting Goods
Tapestry's lawyer: Lululemon is slated to surpass Kate Spade in handbag... Our witness will testify that handbags are a Want, not a Need. Judge: You have a slide you call confidential on the screen. Tapestry's lawyer: It's not on the public screen. [Oh.]
Tapestry's lawyer: What does the FTC have? Three 2021 emails from a Tapestry executives with parentheticals about "accessible luxury." That is not enough
Lawyer for Capri / Michael Kors: His handbags peaked in 2015-16. The company's signature jet-set look was very hot. But recently they have lost their mojo
Lawyer for Michael Kors / Capri: Michael Kors' bags are down below $100, now out of the luxury market. So it does not comport with the FTC's theory. It's the consumer who sets the price. There's no real demarcation line at $100, to distinguish from Calvin Klein
Lawyer for Michael Kors / Capri: Brand heat happens when consumers are proud to carry a handbag. Consumers are just not getting that from Michael Kors. We can't invest in innovation or craftsmanship. Capri has been trying but the numbers tell the story.
Lawyer for Michael Kors / Capri: We cannot wait deep into 2025. What Your Honor decides here is determinative. We submit you will agree this transaction is not anticompetitive. Thank you.
Judge: Let's break. more on X for Subscribers here and Substack here
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