In federal trial, Michael Kors says it's harder to sell handbags in TikTok and Taylor Swift era

Core Viewpoint - The antitrust trial regarding Tapestry's $8.5 billion acquisition of Capri, which includes Michael Kors, highlights the challenges faced by legacy fashion brands in maintaining relevance in a rapidly changing market influenced by social media and consumer preferences [2][3]. Group 1: Market Dynamics - The FTC argues that the merger would create a dominant player in the handbag market, potentially leading to higher prices and lower product quality for consumers [4]. - Tapestry and Capri's attorneys counter that competition has increased, with consumers now considering both luxury and fast-fashion options, as well as shopping through online and secondhand platforms [5]. Group 2: Company Performance - Capri's stock has declined approximately 24% this year, underperforming compared to the S&P 500's 18% gain and Tapestry's 17% rise [6]. - Michael Kors' revenue fell by 14.2% on a reported basis and 13.3% on a constant currency basis in the most recent fiscal quarter compared to the previous year [6]. Group 3: Brand Relevance - Michael Kors acknowledged that his brand has experienced a decline in popularity and requires a refresh, indicating a state of "brand fatigue" [3][4]. - The designer emphasized the importance of staying connected to consumer trends and learning from emerging brands, citing an example of a newcomer that gained attention through celebrity endorsement [7]. Group 4: Retail Impact - Former Macy's CEO Jeff Gennette noted that reliance on Michael Kors' brand negatively impacted department store sales, contributing to a downward trend for Macy's [8].