New York Fashion Week isn’t the only major fashion event happening this month. On Monday, fashion icon Michael Kors testified in an antitrust trial in Manhattan as a Federal Trade Commission lawsuit filed in April that seeks to block Tapestry’s $8.5 billion acquisition of Capri Holdings.
The deal, if approved, would place six major fashion brands under one company: Tapestry’s Coach, Kate Spade, and Stuart Weitzman; and Capri’s Versace, Jimmy Choo, and Michael Kors. The FTC argues this deal would “eliminate direct head-to-head competition between Tapestry’s and Capri’s brands” and give Tapestry a “dominant share” of the accessible luxury handbag market—or bags made from quality leader and craftsmanship offered at a more affordable price.
“With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement. “This deal threatens to deprive consumers of the competition for affordable handbags, while hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions.” The FTC declined to comment further on the matter when asked by Fortune, and Tapestry did not respond to a request for comment.
In other words, the FTC thinks if the acquisition is successful, it would create a massive company with the power to unfairly raise prices for consumers.
Kors, who founded his namesake brand at age 22 in 1981, argued in his testimony that his brand doesn’t have it all that great right now. Michael Kors’ first quarter revenue dropped more than 14% year-over-year, according to Capri’s first quarter fiscal 2025 results posted Aug. 8. Capri did not respond to Fortune’s request for comment about the FTC suit.
“Sometimes you’ll be the hottest thing on the block,” Kors said in his testimony. “Sometimes you’ll be lukewarm. Sometimes you’ll be cold.” Kors still serves as the company’s chief creative director.
Kors blamed some of the dwindling business to the nature of social-media marketing and advertising. He used Taylor Swift’s impact as an example. Kors, who’s been in the fashion industry for decades, had never heard of handbag designer Aupen until he saw a photo of Swift carrying it. After seeing Swift carrying the bag, Kors attempted to visit the designer’s website, but it had crashed.
“It shows you the power of women like this,” Kors said in his testimony. Kors even admitted his brand needs a refresh as it’s “reached a point of brand fatigue.”
Legacy brands struggle in an influencer era
Brand marketing experts say Kors has a point.
“Legacy brands often struggle in the influencer era because their traditional methods of building brand prestige through exclusivity and heritage can clash with social media's fast-paced, democratized world,” Contrecia T. Tharpe, chief storyteller and strategist at marketing, branding, and communications agency FayeVaughn Creative, told Fortune. “Influencers, by nature, speak directly to consumers in a personal and often casual manner, which can make legacy brands feel out of touch or inaccessible.”
That means brands like Michael Kors need to find new ways to maintain their status while adapting to the “immediacy and engagement” influencers offer, Tharpe said.
Rebecca Horan, owner and brand strategist at Rebecca Horan Consulting, also said it can be difficult for legacy brands to compete with an organic “social media darling,” meaning the post went viral without paid advertising behind it.
“Even if the brand were to channel all of its marketing funds into paid influencer marketing, nothing can really match the sales impact of having the good fortune to enter the zeitgeist on a rocketship, like Aupen experienced,” Horan told Fortune.
But, “the question then becomes, does that rocketship brand have staying power or is it effectively a one-hit-wonder?”
The trial is expected to finish on Tuesday. While it’s impossible to predict the outcome, the trial shines a light on some of the challenges facing the luxury fashion industry.
“The result could set a precedent for how luxury brands operate in the modern market,” Tharpe said. If Capri is found in violation of antitrust laws, “it could lead to increased scrutiny of business practices within the fashion industry, potentially altering how brands collaborate and compete.”
This story was originally featured on Fortune.com