When American luxury goods company Tapestry (owner of Kate Spade, Coach, and more) wanted to buy Capri, the owner of Versace (Capri also owns Jimmy Choo and Michael Kors), the FTC’s Joe Biden-appointed Chair, Lina Khan, and the other commissioners sank the deal. The deal would have created a powerhouse American luxury company that could compete with the Italian and French companies that dominate the market. Now, Prada is buying Versace for peanuts, and American luxury will be at an even steeper disadvantage.
Before Khan worked for Biden at the FTC, she worked for the Bill Gates and Michael Bloomberg-funded New America Foundation, and the Soros-funded Open Markets Institute. Today, the Editors of The Wall Street Journal slammed Khan’s poor decision to block the Tapestry-Capri merger, writing:
The FTC argued that the merger would reduce competition in the narrowly-defined market for “accessible luxury” and “affordable” handbags that retail for several hundred dollars. Maybe Washington’s insiders consider such handbags affordable, but they are genuine luxuries for most middle-class Americans.
Not so, said the FTC. The agency argued that Versace, Kate Spade and Coach aren’t “true luxury” brands because they periodically offer discounts. The FTC’s arbitrary definition of the market in which Capri and Tapestry compete excluded Louis Vuitton, Prada, Gucci, Hermes, Chanel and most of their competitors.
Read more here.
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