Tapestry Inc. (TPR, Financial), the powerhouse behind Coach and Kate Spade, just pulled the plug on its $8.5 billion mega-merger with Capri Holdings (CPRI, Financial), the owner of Michael Kors and Versace. Why? Antitrust regulators crushed it. The FTC argued the deal would wreck competition in the “accessible luxury” handbag market—a category Tapestry itself coined. A federal judge backed them, slamming the brakes on the merger before it could leave the station. Both companies decided to cut their losses and move on, leaving investors and analysts questioning what's next for Tapestry's growth strategy.
Turns out, Tapestry has no time for pity parties. CEO Joanne Crevoiserat isn't dwelling on what could have been. Instead, she's laser-focused on organic growth, announcing a jaw-dropping $2 billion share repurchase plan funded by cash and new debt. “There's no better investment right now than our own stock,” Crevoiserat said, doubling down on Tapestry's core strengths—agile operations, distinctive brands, and a war chest of cash. CFO Scott Roe chimed in, reaffirming Tapestry's investment-grade status and pledging not to touch acquisitions until Coach and Kate Spade hit sustainable growth. Translation: They're playing the long game, and they're betting big on themselves.
For investors, this pivot could be pure gold. Tapestry is setting aside a hefty $2.8 billion for buybacks this fiscal year, signaling confidence in its future without the distraction of mergers. The decision also sends a clear message to Wall Street: organic growth and shareholder returns are the name of the game. While the blocked merger spotlights the regulatory hurdles for big luxury deals, Tapestry's bold shift back to fundamentals might just be the kind of no-nonsense strategy that gets investors leaning in.
