### Federal Judge Blocks Tapestry’s $8.5 Billion Merger with Capri

In a surprising turn of events, a federal court judge has halted the highly anticipated merger between Tapestry, the parent company of Coach, and Capri Holdings, which owns Michael Kors. The $8.5 billion merger, aimed at consolidating six prominent fashion brands under one umbrella, was blocked on Thursday following a brief trial held in New York last month.

Judge Jennifer Rochon granted the Federal Trade Commission's (FTC) motion for a preliminary injunction, effectively pausing the merger process. This ruling comes despite both Tapestry and Capri’s arguments that the merger would benefit consumers by enabling the company to keep up with fashion trends and improve product offerings. Rochon's detailed reasoning was sealed and remains inaccessible to the public.

The FTC had previously expressed concerns that the merger would negatively impact consumers by making affordable luxury handbags less accessible. Additionally, the commission argued that employees might face reduced benefits and lower salaries if the companies were to merge. This outlook aligns with the Biden administration's push for maintaining competition in various industries to help keep prices low, amid heightened inflation affecting essential goods like apparel and food.

Following the judge's order, Tapestry's stock surged by 10%, while Capri's shares took a significant hit, plunging approximately 50%. Representatives from both companies were not immediately available for comment.

The decision highlights the increased scrutiny that mergers and acquisitions in the luxury goods sector face under the current administration. The FTC has been actively blocking such deals, aiming to ensure fair competition and protect consumer interests. The situation remains fluid, and further updates are expected as more details emerge from sealed court documents.