NEW YORK – Fashion company Tapestry on Thursday said it is ending a proposed merger with Capri because the two luxury groups do not expect to overcome the antitrust issue within an acceptable time frame.

Companies reached an agreement $8.5 billion deal in August 2023 this would combine Capri, maker of Versace, Jimmy Choo and Michael Kors shoes, bags and accessories, with Tapestry, which produces the same products under the Coach, Kate Spade New York and Stuart Weitzman brands.

However, the agreement ran into numerous obstacles.

in April, Federal Trade Commission sues for obstruction Tapestry’s acquisition of Capri says the deal will eliminate direct competition between the companies’ brands in the affordable luxury handbag arena.

The FTC also alleged that the settlement threatens to eliminate the two companies’ incentive to compete for employees and could negatively impact wages and workplace benefits. The combination of Tapestry and Capri will employ approximately 33,000 people worldwide, the agency said.

Last month, US District judge halts merger, He said this would reduce competition and harm consumers.

Tapestry and Capri made a notification The decision was jointly appealed, but Tapestry said in a statement on Thursday that the outcome of the legal process “is uncertain and is unlikely to be resolved by a date other than February 10, 2025.”

Capri shares lost 4.6% in premarket trading.

New York-based Tapestry described its first quarter as “successful” and said it would accelerate growth in its organic business. The company said its board of directors authorized a stock repurchase plan worth up to $2 billion.

Tapestry shares gained 6.3%.