What: Tapestry is challenging the FTC to define the term "accessible luxury" in legal terms as it seeks to defend its $8.5 billion acquisition of Capri Holdings.

Why it is important: This legal battle is crucial as it will potentially set a precedent for how "accessible luxury" is classified and regulated, affecting marketing strategies and competitive dynamics within the sector.

Tapestry Inc. is currently embroiled in a legal dispute with the Federal Trade Commission (FTC) over its planned $8.5 billion takeover of Capri Holdings, which would bring together major brands like Coach, Kate Spade, and Michael Kors. The FTC argues that the merger could give the combined entity undue influence over the "accessible luxury" handbag market, a term popularized by Coach but not legally defined. Tapestry's defense is complicated by the FTC's lack of a clear definition for what constitutes an "accessible luxury" handbag, questioning whether this includes various types of bags like backpacks and duffel bags, and what price points delineate this market.

Tapestry's legal filings highlight the ambiguity in market definitions, which could range from below $100 to over $1,000, thereby affecting market competition analysis and regulatory oversight. The outcome of this case could influence how companies define and segment their products within the luxury goods market, impacting how they compete and how they are regulated moving forward. Tapestry has urged the court to compel the FTC to clarify its market definition to ensure a fair and expedient trial, emphasizing the need for clarity to accurately reflect market competition in 2024.

Tapestry Pushes FTC to Define ‘Accessible Luxury’ amid court battle to acquire Capri Holdings