The fashion world watched with bated breath as the possibility of a merger between Capri Holdings Limited (formerly Michael Kors Holdings Limited), owner of Michael Kors, Versace, and Jimmy Choo, and Tapestry, Inc., the parent company of Coach, Kate Spade, and Stuart Weitzman, loomed large. While this specific merger ultimately did not materialize, the intense scrutiny it faced from regulatory bodies, particularly the Federal Trade Commission (FTC), offers a compelling case study in the complexities of mergers and acquisitions in the luxury goods sector. This article will explore the proposed merger's details, the FTC's objections, the players involved, and the broader implications for the luxury fashion landscape.
The proposed merger, had it gone through, would have created a behemoth in the American luxury handbag market, combining two of the most prominent players: Michael Kors and Coach. The FTC’s primary concern revolved around the elimination of “fierce head-to-head competition” between these two brands. This competition, the FTC argued, was beneficial to consumers, keeping prices competitive and driving innovation. The elimination of this direct rivalry, they feared, would lead to reduced consumer choice, higher prices, and potentially less innovative product offerings. The FTC’s investigation highlighted the significant market share held by both companies, suggesting that a merger would create an entity with undue market dominance, potentially stifling competition and harming consumers.
Michael Kors Owned By:
Before delving further into the failed merger, it's crucial to understand the ownership structure of Michael Kors. The brand, initially founded by Michael Kors himself, transitioned from a privately held company to a publicly traded one in 2011 via an IPO. This meant that ownership was distributed among numerous shareholders, including institutional investors, mutual funds, and individual investors holding shares on the New York Stock Exchange (NYSE). Therefore, there wasn't a single entity "owning" Michael Kors in the traditional sense, but rather a dispersed ownership structure typical of publicly traded companies. The proposed merger with Tapestry would have significantly altered this structure, with Tapestry becoming the dominant owner of the combined entity.
Who Bought Out Kate Spade?
To understand the context of the proposed merger, it’s essential to examine Tapestry's acquisition of Kate Spade. In 2017, Tapestry (then known as Coach, Inc.) successfully acquired Kate Spade & Company for approximately $2.4 billion. This acquisition significantly expanded Tapestry's portfolio, adding a younger, more playful brand to its existing lineup, complementing the established Coach brand. The Kate Spade acquisition demonstrated Tapestry's ambition to become a major player in the broader luxury accessories market, and the proposed merger with Capri would have been a further step in that direction. The success of the Kate Spade acquisition, however, didn't guarantee the success of the proposed merger with Capri, as the FTC's concerns highlighted significant differences in the competitive landscape.
Michael Kors Owner (pre-merger attempt):
As previously stated, prior to the proposed merger, Michael Kors didn't have a single owner. Instead, it was a publicly traded company, meaning its ownership was fragmented across numerous shareholders. The largest shareholders would have varied over time, depending on market fluctuations and investment strategies. This decentralized ownership structure is common for large corporations, providing liquidity for investors but also diluting individual influence. The proposed merger would have concentrated ownership considerably, transferring a significant amount of control to Tapestry.
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