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Fashion designer Michael Kors (CPRI) cited TikTok trends and Taylor Swift’s embrace of independent brands as proof that the luxury handbag market is competitive in a Manhattan courtroom on Monday.
Kors is testifying after the Federal Trade Commission sued to block a planned $8.5 billion acquisition of Kors’s company. Tapestry Inc. — the owner of Coach (TPR), Kate Spade and Stuart Weitzman — is attempting to purchase Capri Holdings Ltd., the owner of Michael Kors, Versace, and Jimmy Choo. The FTC argued that the deal would stifle competition for “accessible luxury” handbags.
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Kors said that TikTok and other social media have an outsize influence on the brands that shoppers embrace, often prompting shoppers to treat both fast fashion and designer products with equal weight. The designer also argued that social media makes it easier for new brands to launch and become a “sensation.”
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The fashion industry “has become much more elastic,” Kors testified, when asked who he views as his brand’s competition. “[There is] everything from Lululemon (LULU), Zara, Louis Vuitton (MC), to resale.”
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He also cited the emergence of new brands as a sign that the market will continue to be competitive if the merger goes through. Kors added that he only learned about Aupen, a trendy handbag brand embraced by celebrities including Kylie Jenner and Olivia Rodrigo, when he saw a photograph of Swift carrying the company’s bags.
“When I looked at the brand, the website crashed immediately,” he said. “It shows you the power of women like this.”
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During his testimony, Kors also admitted that his brand, founded in 1981, has declined in recent years.
“I think we’ve reached a point of brand fatigue,” he said. “It’s in a state of stasis at this point.”
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“Sometimes you’ll be the hottest thing on the block,” he added, “sometimes you’ll be lukewarm, sometimes you’ll be ice cold.”
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