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The stories that matter about money and politics in the race for the White House
Heavyweights Partnership for New York City may not be the target market for Coach and Michael Kors, but the two “accessible luxury” brands are suddenly sparking interest for the Manhattan-based nonprofit civic group whose mission is to advocate for the Big Apple’s business interests, particularly Wall Street and commercial real estate.
Last week, PFNYC published a public letter She sent a statement to two US senators from New York and two senior members of the New York House delegation asking them to denounce a lawsuit filed by the US Federal Trade Commission, the competition authority. The FTC is trying to prevent two fashion companies, Tapestry and Capri, from merging. combined company It would include brands such as Coach, Michael Kors and Kate Spade with an enterprise value of more than $20 billion.
The FTC argues that consumers would be hurt if Coach and Kors, now part of different companies, no longer competed with each other in the upper-middle-class “accessible luxury” handbag category.
New York’s argument is that both companies are based in the city and Joanne Crevoiserat, Tapestry’s chief executive, is a member of PFNYC’s executive committee. The letter claimed that the FTC’s action was “ideologically motivated” and a “clear case of regulatory overreach.”
It’s not unusual for outside groups to share views on antitrust litigation. But among the prominent names at PFNYC are top bankers and M&A lawyers, whose multimillion-dollar bonuses depend on a thriving deal market. Many of these Masters of the Universe are also Kamala Harris supporters or fundraisers, including Blair Effron, Brad Karp and Rodgin Cohen.
If Harris wins the US presidential election, the question arises whether she will fire FTC Chair Lina Khan and the Justice Department’s Jonathan Kanter, who have aggressively litigated corporate consolidation and even tightened so-called merger guidelines, their rubric used to evaluate deals.
Wall Street and top executives have an outsized influence on New York City politics. President Joe Biden has, to a surprising extent, kept corporate interests at arm’s length, a stance some New Yorkers are no doubt looking to change in the next administration, and PFNYC’s intervention is a harbinger of that.
PFNYC said the Tapestry/Capri merger would help shore up New York’s fashion industry, which it says has been in decline in recent years, and that the U.S. deserved a national luxury champion, much like Europe had LVMH. Tapestry adds that the FTC’s definition of the handbag market is arbitrary and narrow (it once questioned whether duffel bags and backpacks could be considered a type of handbag).
In an interview with the Financial Times, Kathryn Wylde, president and CEO of PFNYC, reiterated the view that Biden regulators were making “politicized” and “inconsistent” decisions in enforcing antitrust law, but expressed surprise when I told her that FTC commissioners had voted 5-0, including its Republican members, to block Tapestry/Capri.
Still, some parts of the FTC’s case remain novel and will be subject to scrutiny. The agency says so-called serial buyers — companies that repeatedly buy smaller competitors as their primary growth strategy — are now worthy of scrutiny.
Harris’s views on competition and economic issues remain a mystery. She has condemned price gouging and proposed a wealth tax, but her longstanding ties to Wall Street and Silicon Valley have given the billionaire class hope that she will not be so harsh if elected president.
One lesson to be learned from New York, however, is that style matters as much as politics. Given how much big business contributes in taxes and philanthropy to the Big Apple, financiers almost demand tokens of respect and flattery in return. Wylde herself revealed her group’s need for support when New York City elected a new, seemingly more caring mayor.
“It’s a huge relief,” Wylde told New York Magazine in 2022. “We’re eight years into a mayor who completely disdained wealth and business, and New York City barely survived. Adams [the new mayor] “He has been very clear that New York City needs corporations, it needs the wealthy, that we have always needed them and we don’t want to demonize them.”