B.A.F.F.L.E.D. Fashion Law

Big Merger Style

After a little break in August, which we hope you enjoyed, too, we're back with a discussion on the collision of 2 of our favorite things--fashion and M&A (mergers and acquisitions). 

Just recently, American luxury group, Tapestry, found itself standing before the court in a standoff against the Federal Trade Commission (FTC). Tapestry, the group housing brands like Coach, Kate Spade, and Stuart Weitzman, is in the midst of an $8.5B acquisition of Capri Holdings, the house containing the likes of Michael Kors, Jimmy Choo, and Versace. As often the case, the crux of this FTC claim is the concern of reduced competition, with so many brands rolling up to the same owner. The concern is the limitation it will put on the "accessible luxury market". It is often considered the market for those just getting into luxury goods, like teens and young professionals, or those choosing not to pay exuberant prices, no matter the heritage of the brand. 

Tapestry and Capri see things differently.

The yet to be united Tapestry and Capri believe this merger will not only be good for the consumer market, but for America on the luxury stage altogether. Tapestry claims the deal will spur innovation, optimize economies of scale on the business side and improve options, selection, and experience on the customers side. 

The FTC counters with the claim the Tapestry foothold would drive up prices, limit consumer options, and make the "accessible luxury market" diminish greatly. They see it creating a greater divide between the haves and have-nots, hurting the economy versus doing any good. Understanding the power of these conglomerates in the marketplace, there's also a good chance this deal could push consumers to younger, upstart brands. This would be a positive for those companies, but the scope to which it'd be able to impact them is difficult to determine. 

Proceedings could take a while, and they're just a little over a week into hearings thus far. If approved, the combo positions Tapestry in a similar vein to LVMH, and elevates the American luxury house in a space long dominated by European houses stunting brand heritage and legacy.

Being such a diverse nation, the hope is there will be great benefits in this deal across all of its many parts, for all of our many diverse business and consumer types.

We'll be watching this one...

B.A.F.F.L.E.D. Fashion Law

Burberry Trailblazes "See Now, Buy Now"; Skirts Fakes

With smartphones being more commonplace than almost

any other item in our daily lives, they've had both positive and harmful affects on the fashion industry.  The "Runway to Rack" model has created its own lane in fashion, and unfortunately hurt designers.  This is the business model allowing a photo of a runway design to immediately hit a manufacturing table, and in as little as 2 weeks--a fast fashion rack.  Luxury, and even startup brands have struggled with this quite a bit in the last decade or so.  Technology, talent, and sales all cut both ways.  

​"See Now, Buy Now"

Burberry is changing the tide.  Starting in September, the iconic British luxury brand will start hosting only 2 runway shows a year, and make the looks seen on the runway immediately available for purchase. Versus Versace has endeavored on something similar. This will certainly help in circumventing how the "Runway to Rack" method has cramped high fashion's brand protection.  

​More Changes Coming?

This new approach will continue Burberry's show of leadership in digital marketing, as well as complement the CFDA's review of the traditional fashion calendar.  Social media is clearly showing it is here to stay.  Burberry ​is showing its longevity is, too.

Thanks to Fashionista.com for this tip!