The Federal Trade Commission (FTC) is facing challenges in its efforts to block an $8.5 billion merger between the parent companies of luxury brands such as Coach, Versace, Michael Kors, Kate Spade, and Jimmy Choo. The FTC's case is centered on concerns about reduced price competition in the 'accessible luxury' handbag market. However, critics argue that the market is broader than the FTC's definition, citing the availability of numerous similarly priced brands and questioning the logical basis of the FTC's market segmentation. Legal advisors from Latham & Watkins and Wachtell are involved in the case, which is filed in New York.
In Michael Kors, Coach merger challenge, FTC’s case is not in the bag https://t.co/voH9wfqpUH https://t.co/o5MHarOmpq
“There’s so much the FTC didn’t consider… The case simply doesn’t make logical sense in many ways.” Good overview of the challenges that the FTC will face in its gambit to block the $CPRI / $TPR merger https://t.co/8IvcQuf7DZ
Silky suit: The parent of luxury brands Kate Spade and Coach and the parent of Michael Kors, Versace and Jimmy Choo were sued in New York in connection with a proposed $8.5 billion acquisition. @lathamwatkins and Wachtell are advising. #lawdotcomradar https://t.co/89gv5Tcwg7 https://t.co/S13iVEwWwH
In Michael Kors, Coach merger challenge, FTC’s case is not in the bag, writes columnist @JgreeneJenna. Read more: https://t.co/y6w3raPDe7 https://t.co/yZU4XSnQ6K
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?
Owners of Coach and Versace snap at FTC after it sues to block $8.5 billion merger. https://t.co/01Hft37Xd3
From @breakingviews: Kate Spade deal veto is lucky dip for trustbusters https://t.co/8sBkfO1Kr8 https://t.co/qhN3Zo8g0H
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