Today, Partnership for New York City CEO Kathryn Wylde sent an open letter to Senator Chuck Schumer (D-NY), Senator Kirsten Gillibrand (D-NY), House Majority Leader Hakeem Jeffries (D-NY), and Representative Jerry Nadler (D-NY) urging them to oppose litigation being brought against two of the city’s top fashion companies, by the Federal Trade Commission. The letter underscores how the proposed acquisition of Capri Holdings by Tapestry Inc. will enable the combined company to better compete in global markets, increase consumer choice, and improve the quality of products. The letter is copied to members of the New York City Congressional delegation in the hope that all have an interest in strengthening the city’s fashion and retail industries that have suffered severe losses in recent years.
The following is the full text of the letter:
Dear Senator Schumer, Senator Gillibrand, Leader Jeffries, and Representative Nadler,
I write on behalf of the Partnership for New York City to request that you take action to support Tapestry Inc.’s acquisition of Capri Holdings and oppose ideologically motivated litigation brought by the Federal Trade Commission to prevent it. The COVID-19 pandemic and rapid technological change have created serious challenges for New York’s fashion and retail industries. The merger of Tapestry and Capri is a strategic measure to enable some of the most iconic U.S. fashion brands to successfully navigate increasing global competition.
The Partnership recently joined with experts from McKinsey & Co. to analyze the state of the city’s fashion industry, finding that the industry’s contribution to the city’s economic output declined 13.6% between 2012 and 2022. Our report calls for business and government to take actions that will strengthen New York-headquartered fashion companies and elevate our city’s most important brands, not undermine them as the FTC suit is attempting to do. We conclude that New York’s status as a global fashion capital is at a crossroads.
Tapestry’s acquisition of Capri will enable the combined company to compete more successfully with the European giants that dominate the international luxury retail market as well as some 700 other companies operating in this sector. The merger would help it to increase quality, innovation, and choices for consumers in New York City and across the country. It is clearly in the interests of the city and the nation that the FTC withdraw its litigation.
Tapestry is a global house of iconic brands, including Coach, kate spade new york, and Stuart Weitzman. The company is headquartered in Manhattan and employs almost 2,000 people in New York, with 37 stores across the state. Tapestry has been recognized as a great place to work, providing industry-leading wages and benefits for its employees and boasting an unusually low turnover rate for the retail sector. Capri Holdings, which is also headquartered in New York City, consists of founder-led brands Versace, Jimmy Choo, and Michael Kors, and has a strong presence in the state.
In bringing this suit, the FTC has fundamentally misunderstood the intensely competitive dynamics of the fashion industry. Legal commentators and industry experts have opined that the FTC’s lawsuit makes little sense given the intense fragmentation of the industry, robust competition from new entrants and established brands, and the abundance of consumer choice across a wide range of product categories and price points. There is little precedent for the Commission’s challenge to a fashion merger. In fact, the FTC is the lone regulator challenging this transaction, which has received clearance in all other relevant jurisdictions, including in Japan and the European Union.
The suit is a clear case of regulatory overreach. We believe it reflects an ideological bias that presents a threat to the healthy growth of American companies through merger and acquisition, which is often the most effective way to innovate, compete, and preserve jobs. We respectfully request that your offices review and conduct rigorous oversight of the FTC’s decision to bring this case considering the potential economic impact on New York City, New York State, and the U.S. fashion industry. Moreover, we ask that you question the fact that, within a few weeks, the FTC will force Tapestry to litigate in both federal and administrative court simultaneously, imposing a wasteful and inefficient burden on the company and on the federal government and U.S. taxpayers.
This matter is urgent. I am happy to discuss and look forward to hearing what steps you might take to support the fashion industry and a company that contributes so much to the New York brand. Thank you for anything you can do to help avoid an unnecessary economic loss for our city and state.
Sincerely,
Kathryn Wylde
President & CEO
CC:
Hon. Tom Suozzi
Hon. Anthony D’Esposito
Hon. Gregory Meeks
Hon. Grace Meng
Hon. Nydia Velázquez
Hon. Yvette Clarke
Hon. Dan Goldman
Hon. Nicole Malliotakis
Hon. Adriano Espaillat
Hon. Alexandria Ocasio-Cortez
Hon. Ritchie Torres
About the Partnership for New York City
The Partnership for New York City represents the city’s business leaders and largest employers. We work with government, labor, and the nonprofit sector to promote economic growth and maintain the city’s prominence as a global center of economic opportunity, upward mobility, and innovation. The Partnership Fund for New York City contributes directly to projects that create jobs, improve economically distressed communities, and stimulate new business creation. Visit pfnyc.org to learn more.