FTC seeks to block Kate Spade, Michael Kors merger
The Michael Kors Store on Rodeo Drive on Feb. 23, 2017 in Beverly Hills, Calif. (Fg/bauer-griffin/GC Images via Getty Images, FILE)
(NEW YORK) — The Federal Trade Commission is asking a federal judge in New York to block the $8.5 billion merger of Tapestry, the company behind Coach, Kate Spade, and Capri, which controls Michael Kors.
In April, the FTC sued to block the sale, arguing that these brands dominate what’s known as the “accessible luxury” market and that if they combined, consumers would suffer by paying higher prices.
“This has to be the first time the focus of a federal court hearing turned to a $279 Kate Spade tote described as ‘colorful, joyful, feminine, green and white seen on Emily in Paris,” ABC News senior investigative reporter and correspondent Aaron Katersky said on Good Morning America Tuesday.
Tapestry argues the FTC is ignoring the reality of a marketplace, in which consumers have a lot of choices, suggesting it takes a mere stroll through Bloomingdale’s or Macy’s to see Gucci, Kors and Calvin Klein bags fighting for attention.
Michael Kors himself testified last month during a hearing, telling the judge there’s already plenty of competition for handbags, noting that he learned about one brand when he saw a photo of pop superstar Taylor Swift wearing an Aupen bag similar to those made by Kate Spade.
Kors also testified his handbags have “reached a point of brand fatigue” and a lawyer arguing in favor of the merger said it would revitalize the Michael Kors brand, so consumers have yet another choice. The goal, he said, is to sell more handbags to consumers.
The judge took these arguments under advisement and could rule at any time.
(NEW YORK) — Walmart, the world’s largest retailer, is rolling back its diversity, equity and inclusion policies.
This brings it in line with several major corporations that have reviewed their operational practices after facing considerable pressure from conservatives.
No longer considering race and gender as a way to increase diversity when it offers supplier contracts, is an example of the retailer’s reported rollbacks, according to the Associated Press.
The company said it didn’t currently have quotas and didn’t plan to going forward; however, it planned to stop collecting demographic data when determining financing eligibility for grants.
In a statement to ABC News, Walmart said, “Our purpose, to help people save money and live better, has been at our core since our founding 62 years ago and continues to guide us today. We can deliver on it because we are willing to change alongside our associates and customers who represent all of America.”
“We’ve been on a journey and know we aren’t perfect,” the statement continued, “but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers and suppliers and to be a Walmart for everyone.”
Walmart will also be “reviewing grants to Pride events to make sure it is not financially supporting sexualized content targeting kids,” the retail giant told AP.
The changes also extend to Walmart’s sizable third-party marketplace.
For example, those third-party retailers would no longer be able to list and sell “sexual and transgender products aimed at minors,” the company said. An example is chest binders for young people who may be using the products as part of their gender-affirming care.
The world’s largest retailer confirmed the changes on Monday.
They were first announced in a post on X by conservative political commentator Robby Starbuck.
He said that he had been in touch with the Arkansas-based corporation about a story he was doing about “wokeness,” which turned into “productive conversations” — and, ultimately, led to reversals in Walmart’s approaches to DEI.
Other changes that Starbuck listed in his announcement included: discontinuing racial equity training through the Racial Equity Institute, no longer participating in the Human Rights Coalition’s Corporate Equity Index (a national benchmarking tool for LGBTQ individuals) and eliminating the use of Latinx (a gender-neutral word for anyone of Latin descent).
He also stated that Walmart will be eliminating the use of the phrase “DEI” altogether.
“This is the biggest win yet for our movement to end wokeness in corporate America,” wrote Starbuck, who has also gone after companies including Boeing, Lowe’s, Tractor Supply and Deere & Co.
(WASHINGTON) — The Federal Reserve on Thursday will announce its latest decision on the direction of interest rates, setting the path for borrowing costs just two days after the victory of President-Elect Donald Trump.
The Fed cut its benchmark interest rate a half of a percentage point in September, dialing back its yearslong fight against inflation and delivering relief for borrowers saddled with high costs.
The Federal Open Market Committee (FOMC), a policymaking body at the Fed, has forecast further interest rate cuts.
By the end of 2024, interest rates will fall another half of a percentage point from their current level of between 4.75% and 5%, according to FOMC projections. Interest rates will drop another percentage point over the course of 2025, the projections further indicated.
The central bank is widely expected to cut interest rates by another quarter of a percentage point when it meets on Thursday, according to the CME FedWatch Tool, a measure of market sentiment.
In recent months, the U.S. has inched closer to a “soft landing,” in which inflation returns to normal and the economy averts a recession.
Government data released last week showed robust economic growth over a recent three-month period, alongside a continued cooldown of inflation.
U.S. hiring slowed in October, but fallout from hurricanes and labor strikes likely caused an undercount of the nation’s workers, U.S. Bureau of Labor Statistics data on Friday showed.
Since 2021, the Fed has sought to rein in inflation with elevated interest rates. Even after the Federal Reserve cut its benchmark interest in September, it still stands at a historically high level.
Inflation has cooled dramatically from a peak of about 9% in 2022, hovering right near the Federal Reserve’s target rate of 2%.
The trajectory of inflation could shift in the coming months. Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants are widely expected to raise consumer prices, experts previously told ABC News.
To be sure, the Fed says it bases its decisions on economic conditions and operates as an independent government body.
When asked previously about the 2024 election at a press conference in Washington, D.C., in December, Powell said, “We don’t think about politics.”
The election of Trump appears to have delivered a boost for the stock market. The U.S. stock market soared at the open of trading on Wednesday, just hours after Trump declared victory.
The Dow Jones Industrial Average climbed more than 1,300 points, amounting to a nearly 3% rise in the index. The S&P 500 and the tech-heavy Nasdaq each jumped more than 2%.
Shares of Tesla, the electric vehicle company headed by Trump ally Elon Musk, spiked about 14.5% in early trading on Wednesday.
(BERLIN) — Workers for the largest online retailer in the world are planning to go on strike during one of the busiest shopping weekends of the holiday season.
Amazon employees are preparing to protest in 20 countries, including in major cities in the United States, Germany, the United Kingdom, Japan and Brazil, starting on Black Friday over “labor abuses, environmental degradation and threats to democracy,” according to UNI Global Union and Progressive International, a Switzerland-based global labor union.
Dubbed the “Make Amazon Pay days of resistance,” the strike is scheduled to last from Black Friday through Cyber Monday, the union announced in a press release. Demonstrators are calling for increased wages and for employees to be permitted to unionize.
The strike could lead to delays in holiday deliveries for customers, economy experts told ABC News.
Unions and allied groups around the world are planning to participate, according to UNI Global Union.
Thousands of workers in the German cities of Graben, Dortmund Werne, Bad Hersfeld, Leipzig, Koblenz and Rheinberg will also protest, in addition to hundreds in New Delhi, who are demonstrating to demand fair treatment following the mistreatment of workers during a heat wave in July, the union said.
The Association for the Taxation of Financial Transactions and Citizen’s Action will hold protests in multiple cities across France, and garment workers will also take to the streets in Bangladesh, the union said.
This year marks the fifth annual Make Amazon Pay demonstration, which aims to “hold Amazon accountable around the world” by targeting a busy holiday shopping weekend. In 2023, Amazon represented 18% of the worldwide Black Friday sales, with more than $170 billion in total holiday sales, according to an earnings report released earlier this year.
“Amazon’s relentless pursuit of profit comes at a cost to workers, the environment and democracy,” said Christy Hoffman, general secretary of UNI Global Union. “[Jeff] Bezos’ company has spent untold millions to stop workers from organizing, but the strikes and protests happening around the world show that workers’ desire for justice — for union representation — can’t be stopped. We stand united in demanding that Amazon treat its workers fairly, respect fundamental rights, and stop undermining the systems meant to protect us all.”
Amazon defended its treatment of workers in a statement to ABC News on Thursday.
“This group is being intentionally misleading and continues to promote a false narrative,” Amazon spokesperson Eileen Hards said. “The fact is at Amazon we provide great pay, great benefits, and great opportunities — all from day one. We’ve created more than 1.5 million jobs around the world, and counting, and we provide a modern, safe, and engaging workplace whether you work in an office or at one of our operations buildings.”
The company announced earlier this year a $2.2 billion investment to increase pay for fulfillment and transportation employees in the U.S. As a result, the average base wage for these employees is now more than $22 per hour and the average total compensation more than $29 per hour when the value of their elected benefits is factored in, according to the company.
Comprehensive benefits for these employees that begin on the first day of employment include health, vision and dental insurance; a 401(k) with 50% company match; up to 20 weeks paid leave, which includes 14 weeks of pregnancy-related disability leave and six weeks of parental leave; and Amazon’s Career Choice program, which prepays college tuition, according to Amazon.
An earlier statement to ABC News from Amazon stated: “While we’re always listening and looking at ways to improve, we remain proud of the competitive pay, comprehensive benefits and engaging, safe work experiences we provide our teams.”
Amazon workers have been outspoken in recent years about workers’ rights, especially as the 2020 COVID-19 pandemic increased the number of online orders. E-commerce sales in the U.S. increased by $244.2 billion — or 43% — in 2020, the first year of the pandemic, rising from $571.2 billion in 2019 to $815.4 billion in 2020, according to the Census Bureau’s Annual Retail Trade Survey.
In 2022, a worker-led independent group led the first-ever U.S. union at the company, unionizing a 6,000-employee Amazon warehouse in Staten Island, New York.
While subsequent attempts at facilities in Alabama and New York have failed, efforts have continued.
In June 2023, nearly 2,000 Amazon workers organized a walkout after a mandate to return to the office was issued. In Kentucky, Amazon employees who spoke to ABC News alleged that the company was leading a union-busting campaign to discourage employees from organizing.
Amazon told ABC News last year that the disciplinary action taken by the company at an Amazon facility in Kentucky came in response to infractions of company policy.
“Amazon squeezes everything that it can get, but it changes its behavior depending on its jurisdiction,” James Schneider, communications director for Progressive International, told ABC News this week. “Let’s say, in Sweden, it engages much better at how it operates with trade unions. But in the U.S., it engages in union busting.”
A 2022 report by the United Nations’ International Labour Organization found that post-pandemic inflation and the rising cost of living have been decreasing the value of minimum wage globally.
The rise of inflation has paved the way for collective action, experts say. (Starbucks was also part of the 2022 union resurgence.)
“Amazon is everywhere, but so are we. By uniting our movements across borders, we can not only force Amazon to change its ways but lay the foundations of a world that prioritizes human dignity, not Jeff Bezos’ bank balance,” said Varsha Gandikota-Nellutla, Progressive International’s co-general coordinator.
