Pedestrians pass a Coach store and a Michael Kors store.
Scott Olson | Getty Images
A federal judge has been blocked The Tapestry’s discovery of Capri on Thursday following a brief trial last month in New York.
In his order, Judge Jennifer Rochon granted the Federal Trade Commission’s proposal for a preliminary injunction to block the proposed merger, which would marry the two largest American luxury houses and include six fashion brands under one company: Tapestry Coach, Kate Spade and Stuart Weitzman and Capri’s. Versace, Jimmy Choo and Michael Kors.
Tapestry’s stock rose 14% after the order was placed and Capri’s fell more than 52%.
Representatives for Tapestry did not immediately return a request for comment.
Rochon’s reasoning behind the order was not immediately clear. The detailed opinion is filed under seal and is not currently available to the public.
The former rival and longtime competitor announced the $8.5 billion deal more than a year ago but the FTC sued to block it in April and sought a preliminary injunction to stop the deal.
The FTC argued that if the companies merged, it would harm consumers by making the affordable handbag market inaccessible and would leave workers with worse wages and benefits. Tapestry said consumers would be better off if it merged with Capri because it would allow them to keep up with trends faster, offer better products and reach more customers.
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