ve given the fashion groups a competitive edge in today’s market, the consensus opinion seems to be that it was a close call for Tapestry, the parent company of Coach New York, Kate Spade New York and Stuart Weitzman. What retail experts are saying  “The cancellation of the merger between Tapestry and Capri is, on balance, the right decision,” GlobalData managing director Neil Saunders told Inside Retail. “The chances of winning an appeal were slim and time was running out to strike a deal.” While the deal was technically on pause pending a full trial, it would have been impossible to tie up all the loose ends by the time the contract expired on February 10.  “Tapestry ending the Capri merger deal is the right move considering it’s been a battle to get the FTC on board,” Liza Amlani, the principal and co-founder of Retail Strategy Group, told Inside Retail. “The FTC clearly has something to prove with blocking this merger and the only ones that will suffer in the end are the Capri group of brands.” Indeed, Saunders pointed out that Tapestry is probably better off. “The cancellation is something of a lucky escape. At the time it made its original offer, there were concerns it was overpaying,” he said. Capri is a global fashion luxury group consisting of Versace, Jimmy Choo and Michael Kors. Since the deal was first announced, its struggles have only intensified, making the acquisition price seem unwise.  Tapestry’s stock had achieved a year-to-date gain of close to 60 per cent at the close of trade on November 14, while Capri’s stock had dropped by nearly 60 per cent in the same time period. Marie Driscoll, a chartered financial analyst and a professor at Parsons, The New School and the Fashion Institute of Technology, hypothesized that Capri and its brands may have prematurely expected the deal to go through and lost momentum because they anticipated being absorbed into a bigger portfolio company with new processes, mandates and ways of doing business.  Both Saunders and Driscoll suggested the merger would have been more trouble than it was worth for Tapestry. Trying to fix various problems from multiple “broken” brands would have ended up sapping an excessive amount of time and resources, they said. While the end of the deal has put a temporary hold on Tapetry’s ambitions to become a bigger house of luxury brands, Saunders and Driscoll noted the fashion group is strong and has some good assets, especially in Coach, so it will still be able to produce pleasing sales and profit numbers.  Saunders expects Tapestry to be able to pursue future growth by selectively adding more brands to its portfolio if it finds the right opportunities to do so. Given what is expected to be a less restrictive environment for mergers and acquisitions under the Trump administration arriving in 2025, Driscoll said she “wouldn’t be surprised to see Tapestry out shopping again for another attractive contemporary brand(s) to add to its modern luxury portfolio.” What’s next for Capri  All three analysts agreed that Capri is in a much more difficult position.  “The company has been badly managed and has neglected its brands in the belief that a merger would happen,” Saunders said. “The latest sales numbers look terrible, and an enormous amount of corrective action is needed to get things back on track, especially at Michael Kors. Capri now faces walking the long road to recovery alone.” Amlani observed that Tapestry’s success in rebuilding Coach’s popularity with consumers, especially Gen Z age, further highlights Capri’s weakness with Michael Kors.  “Relevance is critical in fashion and Tapestry is further along in connecting product assortments, customer insights and marketing than the Capri group of brands,” she explained.  “They need to connect with their customer, find new ones and improve their product assortments alongside the right marketing initiatives to help them stay afloat.” According to John Idol, Capri’s chairman and chief executive officer, the team is already moving full steam ahead with several brand-saving measures.  “Looking ahead, I remain confident in Capri’s long-term growth potential for numerous reasons,” Idol said in a public statement.  He went on to explain that the fashion group has four elements working in its favor: “An incredible portfolio of luxury houses, each with their own rich heritage, exclusive DNA and strong consumer loyalty.” “A solid distribution network to build upon. With over 1200 directly operated luxury retail locations globally combined with our robust digital platform, we have a strong framework for the future. Additionally, our extensive wholesale network serves as an important channel to reach consumers in areas where we do not have our own stores.”  A “management team, design talent and a global workforce of 15,000 employees to successfully execute our initiatives.” The “financial strength to implement our strategies.” One measure the fashion group is taking to secure a bit more financial cushioning is cutting out the fat by closing underperforming stores.  The company plans to close about 155 Michael Kors stores over time, trimming its fleet down to 650 doors while renovating roughly 150 locations.  “Given our company’s performance over the past 18 months, we have recently started to implement a number of strategic initiatives to return our luxury houses to growth,” Idol said. “Across Versace, Jimmy Choo and Michael Kors, we are focused on brand desirability through exciting communication, compelling product and omni-channel consumer experience.”