Nov. 14 (UPI) — Fashion companies Capri Holdings Limited and Tapestry — parent companies behind the Coach and Michael Kors brands, respectively — ended their $8.5 billion merger agreement Thursday. The deal was blocked by a U.S. Federal Trade Commission Lawsuit in April that won a preliminary injunction against it.

Capri and Tapestry said in statements they had mutually agreed to end their merger since the FTC lawsuit would not likely be resolved by the merger agreement outside the end date of Feb. 10, 2025.

“We have always had multiple paths to growth and our decision today clarifies the forward strategy. Building on our successful first quarter, we will move with speed and boldness to accelerate growth for our organic business,” Tapestry CEO Joanne Crevoiserat said in a statement,

Capri Chairman and CEO John D. Idol said in a statement, “With the termination of the merger agreement, we are now focusing on the future of Capri and our three iconic luxury houses. Looking ahead, I remain confident in Capri’s long-term growth potential for numerous reasons.”

Tapestry Chief Financial Officer Scott Roe said in a statement that with the merger terminated, $2 billion will be used to buy back Tapestry stock.

“Tapestry’s steadfast commitment to deliver meaningful shareholder value is unchanged,” Roe said in the statement. “Our strong and consistent cash flow underpins our foundational commitments to invest in our brands and business as well as fund our dividend program. Further, today’s additional $2 billion share repurchase authorization highlights the strength and flexibility of our balance sheet to unlock incremental value, while maintaining our firm commitment to a solid investment grade rating.”

The FTC’s April lawsuit to block the merger said, “With Tapestry’s acquisition of Michael Kors, the closest competitor of Coach and Kate Spade, consumers will lose the benefit of head-to-head competition on price, discounts and promotions, innovation, design, marketing, and employee wages and workplace benefits.”

In October federal Judge Jennifer Rochon granted a preliminary injunction sought by the FTC to block the merger.

“Although the court is not indifferent to the uncertainties faced by the merging firms and their employees, their concerns amount to private equit[ies], and cannot on [their] own overcome the public equities that favor the FTC,” Judge Rochon wrote in the order.

Wall Street analysts believed Tapestry was overpaying in the merger with Capris when the company’s shares dropped by roughly 50% after that ruling while Tapestry’s stock rose by 10%.

Capris scheduled a call with analysts for late Thursday morning to go over Capris strategies in the wake of the failed merger.

The merger would have combined Tapestry brands Coach, Kate Spade and Stuart Weitzman with Capri’s Versace, Jimmy Choo and Michael Kors brands.