The $8.5bn legal battle shaking the US fashion industry | White & Case LLP

In Financial Times, White & Case partner George Paul is quoted on the potential regulatory risks for companies looking to acquire clear competitors, amid the Federal Trade Commission’s attempt to block fashion house Tapestry’s US$8.5 billion planned acquisition of competing fashion company, Capri.

Tapestry – which owns Coach, Kate Spade and Stuart Weitzman – agreed last year to purchase Capri – the owner of Michael Kors, Versace and Jimmy Choo, but the proposed deal has been stuck in limbo since the Federal Trade Commission sued to block the combination five months ago.

If regulators are successful in blocking the purchase, “Any client who is interested in buying a clear competitor, even if there are many others in the market, would have major regulatory risk,” said Paul.

“If there’s that kind of language in your documents, no matter what the product market is, you have to be concerned that you’ll get sued” should the regulator win this case, he said. “Because as long as they’re close substitutes,” Paul notes, “the FTC seems to be discounting the consumer’s ability to actually make the switch” to other brands.

See the full Financial Times article here.

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