In a high-profile FTC antitrust lawsuit, fashion designer Michael Kors took the stand in a Manhattan courtroom on Monday to defend the competitive nature of the luxury handbag market as part of his testimony in the ongoing legal battle over an $8.5 billion acquisition deal. According to QZ, Kors highlighted the powerful influence of social media platforms like TikTok and Taylor Swift’s influence on fashion trends as evidence that competition in the sector remains fierce.
Kors’ testimony came as the Federal Trade Commission (FTC) is trying to block a proposed merger between Tapestry, the parent company of Coach, Kate Spade and Stuart Weitzman, and Capri Holdings, which owns Michael Kors, Versace and Jimmy Choo. The FTC argues that the merger could reduce competition in the “affordable luxury” handbag market and lead to higher prices for consumers.
But Kors, whose main business is Capri Holdings, which owns the eponymous brand, argued that the rise of social media has made the market more dynamic. Trends on TikTok often determine a brand’s popularity, and consumers sometimes equate fast fashion with high-end designer goods, Kors said, according to Reuters. “The fashion industry has become much more flexible,” he said, highlighting how the digital age has increased the potential for new brands to emerge and disrupt existing brands.
Read more: Deal between Coach and Michael Kors owners clears EU and Japan regulatory hurdles
Using Taylor Swift as a prime example of a trendsetter, Kors explained how social media has made it easier for lesser-known brands to gain attention. As evidence, he pointed to Swift’s recent endorsements of independent fashion brands, such as Orpen, a handbag brand beloved by celebrities like Kylie Jenner and Olivia Rodrigo. “When I saw that brand, the website crashed immediately,” Kors said, pointing to Swift’s enormous influence on consumer behavior. “It shows the power of these women.”
Despite his optimistic assessment of the market’s fluidity, Michael Kors acknowledged the challenges facing his brand, which he founded in 1981. The designer noted that Michael Kors has experienced decline in recent years, with “brand fatigue” setting in. “I think we’ve reached a plateau,” Kors said. “Sometimes we’re the hottest thing in the neighborhood, but sometimes we’re middling, sometimes we’re cold.”
His comments offered a candid look at the ebb and flow of competition in the fashion industry as Tapestry seeks to move forward with its acquisition of Capri Holdings Inc. While the FTC continues to argue that the acquisition could stifle competition, Michael Kors’ testimony aimed to show that the fashion industry remains robust and unpredictable, driven by rapidly changing digital platforms and consumer trends.
Source: QZ
