The FTC is seeking to block a handbag merger involving companies like $CPRI and $TPR to maintain competition, with concerns about market concentration and price competition. Market speculates on deal approval chances, market definition, and competition with fast fashion in the 'accessible luxury' segment.
How is the market segment "Accessible luxury handbags" defined? No one knows, but there are 100+ brands available on Amazon at >$200 $CPRI $TPR https://t.co/Xp2hYXv0yU
Right now the market is implying about a 30% chance of the $CPRI deal going through at terms. Ie you get paid 7/10 times to bet again Lina Khan, arguing that accessible luxury doesnt compete on price w/ fast fashion and that handbag labor doesnt compete with other retail labor.… https://t.co/uQqDx5WtYa
Basically what I'm saying is can't $TPR win simply by proving accessible luxury- whatever that means - has to compete on price, with fast fashion (or whoever really but thats a logical comp). Not a hard point to prove (speak to anyone who owns a Kors bag). That breaks the market… https://t.co/UWuJHLE64u
This $CPRI $TPR FTC gets more insane the more I think about it. Surely $TPR is just going to line up all the - many hundreds - of similarly-priced handbags (that obviously compete) - and say 'look most of them are not 'accessible luxury', therefore your market definition is…
$CPRI, market seeing around 35-40% chance of deal going through. Can it really be that low? Hot stove effect after $SAVE causing mispricing here, or can the FTC narrowly define markets based on some internal hot docs calling out accessible luxury and/or market power on wages?
Gotta love CEOs hyping themselves as leaders in the “affordable luxury” space and then FTC using that as the market definition. $CPRI $TPR To me this seems like concentration expressly to eliminate price competition. Unlike JBLU SAVE which was to create scale to challenge Big 5 https://t.co/opO96SHygQ
The FTC wants to block a big handbag merger to preserve competition. ‘10,000 alternatives’ could complicate its case. https://t.co/ZxpsQynWhn
Well Cramer agrees with the FTC …. 🤪 ….. there is that. 😂 $CPRI $TPR “accessible luxury handbags 👜” ….. Cramer, “It was a very well written brief…. I am with the FTC … and I didn’t realize how concentrated this business is…” 50% right? 👜…..yet 5-6% in the… https://t.co/GmBTc12qYX