Europe has historically dominated the luxury fashion industry for decades thanks to the creation of some of the world's most renowned high-end brands, such as Chanel, Dior, Gucci, and Louis Vuitton, to name a few.

However, Tapestry and Capri, two American luxury companies, refused to fall behind their European counterparts any longer and devised a plan to take over the luxury fashion world.

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These two U.S. companies own some of the industry's most popular luxury fashion brands. Tapestry owns renowned brands like Coach, Kate Spade, and Stuart Weitzman, and Capri owns esteemed brands, including Versace, Jimmy Choo, and Michael Kors.

Related: Two major fashion handbag brands were just dealt a big blow by the U.S. government

In August 2023, Tapestry Inc. announced it planned to acquire Capri Holdings in an $8.5 billion deal to merge the luxury fashion houses.

If the deal between Tapestry and Capri were to come to fruition, this multi-billion dollar merger would've created one of the largest luxury fashion houses in the world, putting the U.S. at the forefront of luxury fashion and potentially taking over Europe's first-place spot.

The FTC stops the Tapestry and Capri merger

Although this merger could've been a historic moment for American luxury, the Federal Trade Commission (FTC) quickly filed an antitrust lawsuit to block the move as soon as it learned of this fashion takeover plan.

In April, the FTC successfully passed a complaint against both companies to seek a temporary halt on the merger in favor of the public interest.

It argued that the law would be violated as the deal would eliminate brand competition and reduce consumers' accessibility to the affordable luxury handbag market. It would also negatively affect the companies' workforce by removing employee competition, reducing wages and workplace benefits.

Six months later, a verdict was reached, and the FTC completely stopped the merger.

Related: Popular fashion footwear brand makes major change following election results

However, after hearing the disappointing news, Tapestry and Capri announced a plan for appeal. They argued that the facts regarding the FTC's complaints were inaccurate and that the merger didn't infringe on competitive practices but rather benefitted consumers and fashion houses equally.

Tapestry and Capri report their earnings and the results are not good

On Nov. 7, Tapestry TPR and Capri CPRI separately published their latest earnings reports, and while both companies saw declines, one seems to be nosediving.