Tapestry and Capri Terminate $8.5 Billion USD Merger

Tapestry, Inc., parent to the Coach and Kate Spade brands, will no longer acquire rival Capri Holding Ltd., which owns Michael Kors, Versace and Jimmy Choo, after the US Federal Trade Commission successfully blocked the merger, the companies announced on Thursday.

The two conglomerates mutually agreed to terminate the $8.5 billion USD deal after a federal judge ruled to halt the acquisition, stating that it would eliminate direct competition in the mid-tier handbag market. Tapestry previously said it would appeal the court's ruling, but the two companies ultimately decided it would be in their best interest to cut the merger as the outcome of the legal proceedings would likely arrive after the agreement's outside date of February 10, 2025.

The sale would have made strides in America's bid to build a powerhouse parent company akin to Europe's LVMH or Kering, though the merged American fashion group would still have been trailing behind by a decent sum; for context, in 2022, Kering reported sales of €20.35 billion EUR, and LVMH posted sales of €79.2 billion EUR.

Individually, Tapestry and Capri sit in very different financial standings. The former conglomerate's latest report touted a forecast of more than $6.75 billion USD in revenue for the 2025 fiscal year, raking in $1.51 billion USD in sales during the first quarter. Notably, Coach led the company's sales, with revenue climbing 1% to $1.2 billion USD in the period.

Joanne Crevoiserat, Tapestry's CEO, said, "We have always had multiple paths to growth and our decision today clarifies the forward strategy. Building on our successful first quarter, we will move with speed and boldness to accelerate growth for our organic business. Tapestry remains in a position of strength, with distinctive brands, an agile platform, passionate teams, and robust cash flow."

Capri, on the other hand, saw revenue drop 16.4% in the second quarter of the 2025 fiscal year. Versace and Michael Kors' sales fell 28.2% and 16%, respectively, while Jimmy Choo recorded an increase of roughly 6% in the period.

“With the termination of the merger agreement, we are now focusing on the future of Capri and our three iconic luxury houses," John D. Idol, Capri's chairman and CEO, said in a statement. “Given our Company’s performance over the past 18 months, we have recently started to implement a number of strategic initiatives to return our luxury houses to growth. Across Versace, Jimmy Choo and Michael Kors, we are focused on brand desirability through exciting communication, compelling product and omni-channel consumer experience."

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