Capri is a fashion firm that owns several fashion brands, such as Michael Kors, which is a fashion house that manufactures and sells handbags, among other things. Tapestry is similarly a fashion firm, and it owns fashion brands such as Coach and Kate Spade. Like Michael Kors, Coach and Kate Spade are fashion houses that manufacture and sell, among other things, handbags. On August 10, 2023, Capri and Tapestry jointly announced their entry into a merger agreement, pursuant to which Tapestry would purchase Capri for $57 per share in cash. The Capri acquisition would combine three close competitors: Tapestry’s Coach and Kate Spade brands and Capri’s Michael Kors brand.
The Capri class action lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose that: (i) the accessible luxury handbag market is a distinct and well-defined market within the overall handbag market and understood as such by the individual defendants, as well as by other Capri and Tapestry executives; (ii) Capri and Tapestry maintained analogous production facilities and supply chains for their accessible luxury handbags that were distinct from the production facilities and supply chains used to manufacture luxury or mass market handbags, confirming that the accessible luxury handbag market is distinct from the mass market and luxury handbag markets; (iii) Capri and Tapestry internally considered Coach and Michael Kors to be each other’s closest and most direct competitors; (iv) that, conversely, Capri and Tapestry did not internally consider their handbag brands to be in direct competition with luxury handbags or mass market handbags; (v) a primary internal rationale for the Capri acquisition was to consolidate prevalent brands within the accessible luxury handbag market so as to reduce competition, increase prices, improve profit margins, and reduce consumer choice within that market; and (vi) as a result of the above, the risk of adverse regulatory actions and/or the Capri acquisition being blocked was materially higher than represented by defendants.
The Capri class action lawsuit further alleges that after a seven-day hearing, on October 24, 2024, Judge Jennifer L. Rochon of the U.S. District Court for the Southern District of New York granted the U.S. Federal Trade Commission’s motion to preliminarily enjoin the Capri acquisition. In doing so, the Court determined, among other things, that a “substantial body of compelling evidence” demonstrated that, in contrast to their public statements, defendants themselves believed that their brands were direct competitors in a well-defined “accessible luxury handbag market.” In response to this news, the price of Capri stock fell by nearly 50%.
On March 7, 2025, the United States District Court for the District of Delaware appointed Saxena White P.A. as a member of the Executive Committee for the Class.
On May 15, 2025. Lead Plaintiffs filed an amended complaint. On July 14, 2025, Defendants’ filed a motion to dismiss the amended complaint. On September 12, 2025, Lead Plaintiffs filed their answering brief in opposition to the motion to dismiss, and on October 27, 2025, Defendants filed their reply. The motion to dismiss is fully briefed and a decision from the Court is pending.
