The U.S. Federal Trade Commission on Monday sued to block the $8.5 billion acquisition of Capri Holdings by Coach and Kate Spade's parent company, Tapestry .
With the transaction, the luxury brands could be poised to better compete with European luxury names, such as Burberry and LVMH's Louis Vuitton.
Both Tapestry and Capri have been under pressure, as consumers continue to be choosier with discretionary spending.
Yet Capri, in particular, has been more vulnerable because of its heavier reliance than Tapestry on department stores and other wholesale retailers.
The vast majority of Tapestry's sales are through its own website and stores, with wholesale accounting for only about 10% of sales globally in the most recently reported fiscal quarter.
Persons:
Kate Spade's, Kate Spade, Stuart Weitzman, Capri's Versace, Jimmy Choo, Michael Kors, LVMH's Louis Vuitton, Joanne Crevoiserat, Tapestry, Crevoiserat
Organizations:
U.S . Federal Trade Commission, Capri Holdings, Burberry, Tapestry, CNBC
Locations:
Europe, Japan, Capri