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Michael Kors Points to TikTok and Taylor Swift in Defense of Luxury Handbag Market in FTC Case

By  |  September 17, 2024

In a closely watched FTC antitrust case, fashion designer Michael Kors took the stand in a Manhattan courtroom on Monday, defending the competitiveness of the luxury handbag market as part of testimony in an ongoing legal battle over an $8.5 billion acquisition deal. According to QZ, Kors highlighted the powerful influence of social media platforms like TikTok, as well as Taylor Swift’s impact on fashion trends, as proof that competition in the sector remains fierce.

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    Kors’ testimony comes as the Federal Trade Commission (FTC) attempts to block a planned merger between Tapestry Inc., the parent company of Coach, Kate Spade, and Stuart Weitzman, and Capri Holdings Ltd., which owns Michael Kors, Versace, and Jimmy Choo. The FTC has argued that the merger would reduce competition in the “accessible luxury” handbag market, potentially leading to higher prices for consumers.

    However, Kors, whose namesake brand is a key part of Capri Holdings, insisted that the market has become increasingly dynamic, largely thanks to the rise of social media. Per Reuters, Kors said TikTok trends often determine which brands gain popularity, with consumers sometimes placing fast fashion and high-end designer products on equal footing. “The fashion industry has become much more elastic,” he said, emphasizing how the digital age allows new brands to emerge and disrupt established players.

    Read more: Deal Between Coach, Michael Kors Owners Clears Regulatory Hurdles in EU and Japan

    Citing Taylor Swift as a prime example of a trendsetter, Kors explained how social media has made it easier for lesser-known brands to gain traction. As proof, he referenced Swift’s recent support for independent fashion brands, such as Aupen, a handbag label favored by celebrities like Kylie Jenner and Olivia Rodrigo. “When I looked at the brand, the website crashed immediately,” Kors testified, noting Swift’s immense influence on consumer behavior. “It shows you the power of women like this.”

    Despite his upbeat assessment of the market’s fluidity, Kors acknowledged the challenges facing his own brand, which he founded in 1981. The designer admitted that Michael Kors has experienced a decline in recent years, noting that “brand fatigue” has set in. “I think we’ve reached a point of stasis,” Kors said. “Sometimes you’ll be the hottest thing on the block, sometimes you’ll be lukewarm, sometimes you’ll be ice cold.”

    His comments provided a candid look into the competitive ebb and flow of the fashion industry, even as Tapestry seeks to move forward with the acquisition of Capri Holdings. As the FTC continues to argue that the deal could stifle competition, Kors’ testimony sought to demonstrate that the industry remains robust and unpredictable, driven by digital platforms and the fast-paced nature of consumer trends.

    Source: QZ