Capri stock plunges after judge blocks Tapestry merger

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STORY: Shares of Capri - the parent company of Michael Kors - fell as much as 48% in Friday morning trading, after a fashion merger worth $8.5 billion with Coach owner Tapestry was blocked by a federal judge.

Last year, Tapestry agreed to buy Capri in an effort to put luxury brands like Coach, Kate Spade, Stuart Weitzman, Versace, Jimmy Choo and Michael Kors under one roof.

It was a move designed to create a U.S. luxury giant that could better compete with larger European rivals.

But in April, the Federal Trade Commission sued to block the deal.

During an eight-day trial in September, the FTC argued the merger would create a massive company with the power to unfairly raise prices.

The companies argued that handbags are non-essential items that consumers can control the prices of by not buying them if they become too expensive.

The U.S. district judge rejected that defense Thursday.

Tapestry said it believes the ruling was incorrect and plans to appeal.