New York Vogue Week isn’t the one main style occasion taking place this month. On Monday, style icon Michael Kors testified in an antitrust trial in Manhattan as a Federal Commerce Fee lawsuit filed in April that seeks to dam Tapestry’s $8.5 billion acquisition of Capri Holdings.
The deal, if accredited, would place six main style manufacturers beneath one firm: Tapestry’s Coach, Kate Spade, and Stuart Weitzman; and Capri’s Versace, Jimmy Choo, and Michael Kors. The FTC argues this deal would “eliminate direct head-to-head competition between Tapestry’s and Capri’s brands” and provides Tapestry a “dominant share” of the accessible luxurious purse market—or baggage constituted of high quality chief and craftsmanship supplied at a extra inexpensive value.
“With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry,” Henry Liu, director of the FTC’s Bureau of Competitors, mentioned in a assertion. “This deal threatens to deprive consumers of the competition for affordable handbags, while hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions.” The FTC declined to remark additional on the matter when requested by Fortune, and Tapestry didn’t reply to a request for remark.
In different phrases, the FTC thinks if the acquisition is profitable, it could create an enormous firm with the facility to unfairly increase costs for customers.
Kors, who based his namesake model at age 22 in 1981, argued in his testimony that his model doesn’t have all of it that nice proper now. Michael Kors’ first quarter income dropped greater than 14% year-over-year, in line with Capri’s first quarter fiscal 2025 outcomes posted Aug. 8. Capri didn’t reply to Fortune’s request for remark concerning the FTC swimsuit.
“Sometimes you’ll be the hottest thing on the block,” Kors mentioned in his testimony. “Sometimes you’ll be lukewarm. Sometimes you’ll be cold.” Kors nonetheless serves as the corporate’s chief artistic director.
Kors blamed a number of the dwindling enterprise to the character of social-media advertising and promoting. He used Taylor Swift’s influence for example. Kors, who’s been within the style business for many years, had by no means heard of purse designer Aupen till he noticed a photograph of Swift carrying it. After seeing Swift carrying the bag, Kors tried to go to the designer’s web site, nevertheless it had crashed.
“It shows you the power of women like this,” Kors mentioned in his testimony. Kors even admitted his model wants a refresh because it’s “reached a point of brand fatigue.”
Legacy manufacturers wrestle in an influencer period
Model advertising specialists say Kors has some extent.
“Legacy brands often struggle in the influencer era because their traditional methods of building brand prestige through exclusivity and heritage can clash with social media’s fast-paced, democratized world,” Contrecia T. Tharpe, chief storyteller and strategist at advertising, branding, and communications company FayeVaughn Artistic, instructed Fortune. “Influencers, by nature, speak directly to consumers in a personal and often casual manner, which can make legacy brands feel out of touch or inaccessible.”
Which means manufacturers like Michael Kors want to search out new methods to keep up their standing whereas adapting to the “immediacy and engagement” influencers supply, Tharpe mentioned.
Rebecca Horan, proprietor and model strategist at Rebecca Horan Consulting, additionally mentioned it may be troublesome for legacy manufacturers to compete with an natural “social media darling,” that means the put up went viral with out paid promoting behind it.
“Even if the brand were to channel all of its marketing funds into paid influencer marketing, nothing can really match the sales impact of having the good fortune to enter the zeitgeist on a rocketship, like Aupen experienced,” Horan instructed Fortune.
However, “the question then becomes, does that rocketship brand have staying power or is it effectively a one-hit-wonder?”
The trial is predicted to complete on Tuesday. Whereas it’s unattainable to foretell the result, the trial shines a light-weight on a number of the challenges dealing with the posh style business.
“The result could set a precedent for how luxury brands operate in the modern market,” Tharpe mentioned. If Capri is present in violation of antitrust legal guidelines, “it could lead to increased scrutiny of business practices within the fashion industry, potentially altering how brands collaborate and compete.”
