Capri Holdings Limited

On October 24, 2024, a United States District Court determined that Capri’s merger with Tapestry, Inc. (“Tapestry”) would hurt competition and granted the Federal Trade Commission’s (“FTC”) motion for preliminary injunction, blocking the merger.

On this news, Capri’s stock price fell $20.34, or 48.9%, to close at $21.26 per share on October 25, 2024, thereby injuring investors.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the accessible luxury handbag market is a distinct and well-defined market within the overall handbag market and understood as such by the Individual Defendants, as well as by other Capri and Tapestry executives; (2) that Capri and Tapestry maintained analogous production facilities and supply chains for their accessible luxury handbags that were distinct from the production facilities and supply chains used to manufacture luxury or mass market handbags, confirming that the accessible luxury handbag market is distinct from the mass market and luxury handbag markets; (3) that Capri and Tapestry internally considered Coach and Michael Kors to be each other’s closest and most direct competitors; (4) that, conversely, Capri and Tapestry did not internally consider their handbag brands to be in direct competition with luxury handbags or mass market handbags; (5) that a primary internal rationale for the Capri Acquisition was to consolidate prevalent brands within the accessible luxury handbag market so as to reduce competition, increase prices, improve profit margins, and reduce consumer choice within that market; and (6) that, as a result of the foregoing, the risk of adverse regulatory actions and/or the Capri Acquisition being blocked was materially higher than represented by defendants; and (7) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.