Today, large European enterprises dominate the luxury industry.[1] LVMH alone owns seventy-five Maisons with reported revenue of €80.8 billion in fiscal year 2025,[2] and has systematically absorbed some of the world’s most storied brands, including American jeweler Tiffany & Co. in 2021.[3] The United States, home to the world’s largest luxury consumer base,[4] has never produced a fashion conglomerate capable of competing with its European counterparts on the global stage.[5] The proposed merger between Tapestry, Inc. (parent company of Coach, Kate Spade, and Stuart Weitzman) and Capri Holdings Limited (parent company of Michael Kors, Versace, and Jimmy Choo) was the most serious attempt yet to close that gap.[6] Its failure raises a question that goes well beyond the fate of two companies: does U.S. antitrust law permit U.S. fashion companies to build their own conglomerates?
The answer is not purely doctrinal. American antitrust law has long harbored a Brandeisian suspicion of concentrated economic power, with the instinct that bigness in consumer markets is not merely inefficient but democratically corrosive.[7] That instinct experienced a decisive revival under the Biden-era FTC, which embraced a neo-Brandeisian posture that treated structural concentration as presumptively harmful.[8] Yet the Tapestry case reveals that the merger also failed for a reason that has nothing to do with political culture: it was the wrong kind of merger.[9]
This article focuses on that second dimension. Although Section 7 of the Clayton Act[10] draws no formal distinction between transaction types, U.S. enforcement practice treats them very differently and this asymmetry has direct consequences for any American company seeking to build scale in fashion through M&A.[11] By comparing horizontal, vertical, and conglomerate consolidation strategies, this article argues that the structural choice of merger type is as consequential as decisions surrounding market definition and efficiency.
- Horizontal Consolidation Faces More Aggressive Enforcement.
Since the Supreme Court’s landmark merger decision in United States v. Philadelphia National Bank,[12] horizontal mergers have attracted the most aggressive antitrust scrutiny due to their elimination of direct competitors, which causes an immediate and measurable reduction in competitive options for consumers.[13] The 2023 Merger Guidelines intensified this posture, establishing structural presumptions triggered by a post-merger Herfindahl-Hirschman Index exceeding 1,800 or a market share of at least thirty percent.[14]
In FTC v. Tapestry, the court held that Coach, Kate Spade, and Michael Kors were direct competitors in the affordable luxury handbag market, their combination would result in a projected fifty-nine percent market share for Tapestry, and the structural presumption of anticompetitive effect was not surmountable.[15] The deal failed precisely because it combined direct competitors in the same market segment.[16] The lesson for American fashion companies is clear: they should avoid merging with or acquiring direct competitors within the same price tier in a concentrated market like U.S. accessible luxury.
- Vertical Consolidation Is Not Without Risk: Foreclosure, Leverage, and the Shifting Enforcement Landscape.
The DOJ and FTC have, as a matter of longstanding practice, policed vertical mergers more lightly than horizontal ones.[17] The principal theories of anticompetitive harm in vertical mergers are (1) foreclosure, whereby a vertically integrated firm restricts rivals’ access to a critical input or distribution channel, and (2) leverage, whereby dominance in one market is used to establish dominance in another.[18] The Supreme Court in Brown Shoe v. United States[19] called foreclosure “the primary vice of a vertical merger.”[20] The 2023 Guidelines codify this concern by stipulating a “foreclosure share” presumption: vertical transactions where the surviving entity would have above a 50 percent “foreclosure share” would be considered presumptively unlawful.[21]
FTC v. Microsoft Corp. demonstrated that vertical mergers can be cleared subject to conditions.[22] In FTC v. Microsoft Corp., the U.S. Court of Appeals for the Ninth Circuit analyzed whether Microsoft Corporation’s acquisition of video game maker Activision Blizzard, Inc., would substantially lessen competition in violation of Section 7 of the Clayton Act.[23] The Ninth Circuit affirmed the rejection of the FTC’s challenge in May 2025, holding that the government must make a fact-specific showing that the proposed merger is likely to be anticompetitive, and merely showing that some content would be exclusive after a vertical merger does not, without more, establish a substantial lessening of competition.[24] Microsoft’s binding ten-year agreements to keep Call of Duty on PlayStation undermined the foreclosure theory by demonstrating that the acquirer lacked the incentive to withhold access even if it had the ability.[25]
The eyewear industry offers a cautionary counterexample directly relevant to fashion. Luxottica controls over eighty percent of the eyewear supply chain, owning or licensing brands including Ray-Ban, Chanel, Burberry, Versace, and Gucci eyewear, while also operating retail outlets such as Sunglass Hut and LensCrafters, and even vision insurance through EyeMed.[26] When Luxottica and Essilor announced their merger in 2018, the FTC cleared it without conditions, finding that Luxottica’s national share of optical retail was below ten percent and Essilor lacked sufficient downstream market power to recover diverted sales.[27] In other words, Luxottica’s downstream retail operations (e.g., LensCrafters or Pearle Vision) would not be able to recapture sales lost by Essilor in the lens market due to price increases.[28]
Despite the clearance, this is the “vertical foreclosure” or “bottleneck” problem in action, and precisely what conglomerates should avoid by declining to acquire entities that are crucial suppliers to their existing subsidiaries.[29] As Judge Vyskocil noted in dismissing consumer claims against EssilorLuxottica, “it is not illegal for a business to be enormous, and enormously successful, so long as it does not engage in anticompetitive conduct.”[30]
- Congeneric and Conglomerate Consolidation: The Optimal Path.
For fashion companies seeking to build scale while minimizing antitrust exposure, congeneric and conglomerate structures offer the most favorable path, and the European luxury conglomerate model provides the template. Both structures share a decisive advantage over horizontal combinations: they avoid the overlap that invites the most aggressive antitrust enforcement, and they are assessed under a doctrinal framework that is considerably more permissive.[31]
Berkshire Hathaway is the preeminent American example of a successful conglomerate built through acquisitions across unrelated industries: insurance through GEICO; railroads through BNSF; energy through MidAmerican; and food and beverages through Dairy Queen, without triggering meaningful Section 7 scrutiny at any growth stage.[32] The absence of competitive overlap and, therefore, an increase in market concentration at each acquisition step meant that the structural presumption of harm that proved fatal in Tapestry never arose.[33]
The industry and trade press usually apply the term “conglomerate” loosely to any large multi-brand holding company, when, in fact, the portfolio of many European luxury “conglomerates” is mostly congeneric rather than conglomerate. In over four decades, Bernard Arnault systematically expanded LVMH’s portfolio through acquisitions that were congeneric in nature: Givenchy (1988) for haute couture, Sephora (1997) for beauty retail, Tag Heuer (1999) for luxury watches, Bulgari (2010) for high jewelry, Loro Piana (2013) for textiles, Rimowa (2016) for luggage, Belmond (2019) for luxury travel, and Tiffany & Co. (2021) for U.S. jewelry.[34] Each acquisition expanded the portfolio into a related but non-competing category across different price tiers, ensuring that no single acquisition concentrated market share in any defined segment to a degree that would have triggered the structural presumption of illegality.[35]
Cross-industry enforcement patterns confirm the existence of the congeneric and conglomerate advantages. The 2010 Live Nation/Ticketmaster merger combined the country’s largest concert promoter and venue operator with the leading ticketing platform.[36] Both companies served the same end consumer across various layers of the live entertainment industry.[37] The DOJ approved the merger, arguing that it could benefit the industry by enabling the combined entity to offer discounts, an innovative experience, and better service to both artists and fans.[38] However, the approval came with conditions, including a consent decree that requires Ticketmaster to license its platform to a major competing venue company.[39] After a five-year extension of the decree in 2020, the DOJ filed a major antitrust lawsuit against Live Nation in May 2024, joined by thirty state attorneys general, alleging monopolization of the live entertainment market.[40] On March 9, 2026, Live Nation reached a settlement just one week into trial, avoiding a breakup, a result in which the shifting political environment involving the Trump administration played a material role.[41] The structural parallel to Tapestry is instructive. Live Nation/Ticketmaster’s market dominance substantially exceeded what Tapestry and Capri would have achieved in the affordable luxury handbag segment, yet the congeneric combination attracted targeted remedies while the horizontal combination attracted an outright block. The explanation lies in the analytical framework applied, not in the degree of market power achieved.
The collapse of the Tapestry/Capri merger is, at one level, a story about neo-Brandeisian enforcement and the structural presumptions of the 2023 Merger Guidelines. However, it is also a more practical lesson about transaction design. Had Tapestry pursued congeneric or unrelated acquisitions, expanding into adjacent categories like eyewear, fragrance, or jewelry, or into entirely different market segments, rather than absorbing a direct horizontal competitor in the same price tier, the structural presumption that proved fatal would never have arisen, and the path to building an American fashion conglomerate would have remained open.
[1] Pierre-Yves Donzé, Global Luxury: Organizational Change and Emerging Markets since the 1970s (Springer, 2018), https://www.researchgate.net/publication/320256830_The_birth_of_luxury_big_business_LVMH_Richemont_and_Kering.
[2] Solid Performance in a Disrupted Global Economic and Geopolitical Environment, LVMH (Jan. 27, 2026), https://www.lvmh.com/en/publications/solid-performance-in-a-disrupted-global-economic-and-geopolitical-environment.
[3] Aishwarya Venugopal, Coach Owner’s Michael Kors Deal Creates US Giant to Take On European Luxury Rivals, REUTERS (Aug. 10, 2023), https://www.reuters.com/markets/deals/coach-parent-tapestry-talks-buy-michael-kors-owner-wsj-2023-08-10/.
[4] Centre for the Promotion of Imports from Developing Countries, What Is the Demand for Apparel?, https://www.cbi.eu/market-information/apparel/what-demand (last visited Mar. 17, 2026).
[5] Maura Brannigan, Why Is There No Great American Luxury Fashion Conglomerate?, Fashionista (Jul. 7, 2017, updated Oct. 16, 2018), https://fashionista.com/2017/07/american-luxury-fashion-brands-conglomerate.
[6] Press Release, Capri Holdings Ltd., Tapestry, Inc. Announces Definitive Agreement to Acquire Capri Holdings
Limited, Establishing a Powerful Global House of Iconic Luxury and Fashion Brands (Aug. 10, 2023), https://www.capriholdings.com/news/news-details/2023/Tapestry-Inc–Announces-Definitive-Agreement-to-Acquire-Capri-Holdings-Limited-Establishing-a-Powerful-Global-House-of-Iconic-Luxury-and-Fashion-Brands/default.aspx; Evan Clark, The Dream of “an American LVMH” Dims With FTC Challenge to
Tapestry and Capri Merger, WWD (Apr. 29, 2024), https://wwd.com/business-news/financial/ftc-tapestry-capri-lawsuit-american-lvmh-1236339110/.
[7] See Joaquin Recinos, The European Example: A Comparative Look at Antitrust Standards in the US and EU, Colum. Undergraduate L. Rev. (Oct. 2, 2024), https://www.culawreview.org/journal/the-european-example-a-comparative-look-at-antitrust-standards-in-the-us-and-eu.
[8] See Ted Bolema, Decoding the 2023 FTC and DOJ Merger Guidelines: Insights into Shifting Antitrust Enforcement, Mercatus Ctr. (Feb. 15, 2024), https://www.mercatus.org/research/policy-briefs/decoding-2023-ftc-and-doj-merger-guidelines-insights-shifting-antitrust.
[9] See Savyata Mishra & Ananya Mariam Rajesh, Coach Parent Tapestry Terminates $8.5 Billion Deal for Capri, Reuters (Nov. 14, 2024), https://www.reuters.com/markets/deals/coach-parent-tapestry-terminates-85-billion-deal-capri-2024-11-14/.
[10] See Clayton Act § 7, 15 U.S.C. § 18 (2018).
[11] See Jay B. Sykes, Antitrust Regulators Release New Vertical Merger Guidelines, Cong. Rsch. Serv. Legal Sidebar No. LSB10521 (July 21, 2020), https://www.congress.gov/crs-product/LSB10521.
[12] 374 U.S. 321 (1963).
[13] Herbert Hovenkamp & Carl Shapiro, Horizontal Mergers, Market Structure, and Burdens of Proof, 127 Yale L.J. 1996 (2018), https://yalelawjournal.org/pdf/HovenkampShapiro_emxx8mco.pdf.
[14] U.S. Dep’t of Justice & Fed. Trade Comm’n, 2023 Merger Guidelines § 2.1 (Dec. 18, 2023), https://www.justice.gov/d9/2023-12/2023%20Merger%20Guidelines.pdf.
[15] FTC v. Tapestry, Inc., 755 F. Supp. 3d 386, 457-58 (S.D.N.Y. 2024).
[16] Id. at 431-38.
[17] See U.S. Dep’t of Justice & Fed. Trade Comm’n, Vertical Merger Guidelines 2 (2020) (withdrawn 2021), https://www.ftc.gov/system/files/documents/public_statements/1580003/vertical_merger_guidelines_6-30-20.pdf.
[18] See Lina M. Khan, Amazon’s Antitrust Paradox, 126 Yale L.J. 710 (2017), https://yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf.
[19] FTC v. Brown Shoe Co., 384 U.S. 316, 321–22 (1966).
[20] Supra note 14 at 732.
[21] Katherine I. Funk, Alex S. Lewis, FTC and DOJ Propose Major Overhaul of Merger Guidelines, Baker Donelson (July 26, 2023), https://www.bakerdonelson.com/ftc-and-doj-propose-major-overhaul-of-merger-guidelines.
[22] FTC v. Microsoft Corp., No. 23-cv-02880, 2023 WL 4443412 (N.D. Cal. July 10, 2023).
[23] Gerald A. Stein & Nicholas A. Valera, The Ninth Circuit Properly Calls to Duty Precedents in Rejecting FTC Claim Against Microsoft, 40 Wash. Legal Found. Legal Backgrounder No. 7 (July 1, 2025), https://www.wlf.org/2025/07/01/publishing/the-ninth-circuit-properly-calls-to-duty-precedents-in-rejecting-ftc-claim-against-microsoft/.
[24] See FTC v. Microsoft Corp., 136 F.4th 954, 971 (9th Cir. 2025), https://plus.lexis.com/api/permalink/c20a7221-93b5-4e2c-b9fe-41fcf9c25e2c/?context=1530671.
[25] See FTC v. Microsoft Corp., 681 F. Supp. 3d 1069, 1099, https://plus.lexis.com/api/permalink/730dc99d-a301-4261-a954-0226b6e6f1bd/?context=1530671.
[26] See Ana Swanson, Meet the Four-Eyed, Eight-Tentacled Monopoly That is Making Your Glasses So Expensive, Forbes (Sept. 10, 2014), https://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-four-eyed-eight-tentacled-monopoly-that-is-making-your-glasses-so-expensive/.
[27] See Statement of the Federal Trade Commission Concerning the Proposed Acquisition of Luxottica Group by Essilor, FTC (Mar. 1, 2018), https://www.ftc.gov/system/files/documents/closing_letters/nid/1710060commissionstatement.pdf.
[28] U.S. Dep’t of Justice & Fed. Trade Comm’n, 2023 Merger Guidelines § 2.1 (Dec. 18, 2023), https://www.justice.gov/d9/2023-12/2023%20Merger%20Guidelines.pdf.
[29] See Ana Swanson, Meet the Four-Eyed, Eight-Tentacled Monopoly That is Making Your Glasses So Expensive, Forbes (Sept. 10, 2014), https://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-four-eyed-eight-tentacled-monopoly-that-is-making-your-glasses-so-expensive/.
[30] Mike Scarcella, EssilorLuxottica Defeats Consumer Antitrust Lawsuits over Frames, Lenses, Reuters (Sept. 26, 2025), https://www.reuters.com/legal/government/essilorluxottica-defeats-consumer-antitrust-lawsuits-over-frames-lenses-2025-09-26/.
[31] U.S. Dep’t of Justice, Non-Horizontal Merger Guidelines § 4.0 (1984), https://www.justice.gov/atr/non-horizontal-merger-guidelines.
[32] Berkshire Hathaway Inc., 2024 Annual Report to Shareholders 2–4 (2025), https://www.berkshirehathaway.com/2024ar/2024ar.pdf.
[33] Organisation for Economic Co-operation and Development, Conglomerate Effects of Mergers – Note by the United States, DAF/COMP/WD(2020)7 (June 4, 2020), https://www.ftc.gov/system/files/attachments/us-submissions-oecd-2010-present-other-international-competition-fora/oecd-conglomerate_mergers_us_submission.pdf.
[34] LVMH Moët Hennessy Louis Vuitton, Our History, https://www.lvmh.com/en/our-group/history (last visited Mar. 2026).
[35] Organisation for Economic Co-operation and Development, Conglomerate Effects of Mergers – Note by the United States, DAF/COMP/WD(2020)7 (June 4, 2020), https://www.ftc.gov/system/files/attachments/us-submissions-oecd-2010-present-other-international-competition-fora/oecd-conglomerate_mergers_us_submission.pdf.
[36] United States v. Ticketmaster Entm’t, Inc., 2010 U.S. Dist. LEXIS 88626, https://plus.lexis.com/api/permalink/ac9c6edc-5b28-4c16-af89-ceaf1d19d856/?context=1530671.
[37] Josh Withrow, The Complexities of Antitrust Action Against Live Nation and Ticketmaster, R St. Inst. (Feb. 25, 2025), https://www.rstreet.org/research/the-complexities-of-antitrust-action-against-live-nation-and-ticketmaster/.
[38] United States, et al. v. Ticketmaster Entertainment Inc. and Live Nation Inc.; Proposed Final Judgment and Competitive Impact Statement, 75 Fed. Reg. 6709 (Feb. 10, 2010), https://www.federalregister.gov/d/2010-2754.
[39] Josh Withrow, The Complexities of Antitrust Action Against Live Nation and Ticketmaster, R St. Inst. (Feb. 25, 2025), https://www.rstreet.org/research/the-complexities-of-antitrust-action-against-live-nation-and-ticketmaster/.
[40] See id.
[41] Nilay Patel, Everyone Hates Ticketmaster. Why’d Trump Go Easy on Them?, The Verge (Mar. 26, 2026, 11:31 AM EDT), https://www.theverge.com/podcast/900540/live-nation-ticketmaster-lawsuit-antitrust-trump-doj-settlement.
