In a federal trial, Michael Kors testifies that selling handbags in the TikTok and Taylor Swift era is more challenging.

• Fashion designer Michael Kors testified Monday about competition in the handbag industry.
• The Federal Trade Commission is attempting to prevent Tapestry from acquiring Capri for $8.5 billion, which would result in six brands, including Michael Kors and Coach, being owned by a single company.
• The trial is expected to wrap up on Tuesday.

In a federal courtroom on Monday, renowned fashion designer Michael Kors discussed the intense competition in the industry, where brands' popularity can fluctuate rapidly due to viral TikTok videos and images of celebrities endorsing them, such as Taylor Swift and Beyoncé.

The Federal Trade Commission has initiated an antitrust trial in Manhattan to prevent 's $8.5 billion acquisition of Capri. If approved, the deal would result in six fashion brands being owned by a single company: Tapestry's Coach, Kate Spade and Stuart Weitzman, along with Capri's Versace, Jimmy Choo and Michael Kors.

On Monday, the FTC summoned Kors, the founder of his eponymous brand, who has been its chief creative director since 1981, to give testimony. However, in his statement, Kors revealed that even established brands like his own can face challenges and lose consumer loyalty.

""Sometimes you'll be the hottest thing on the block, sometimes you'll be lukewarm, and sometimes you'll be cold," he said."

He admitted that his namesake label has lost popularity and requires a revamp.

He remarked, "I believe we're experiencing brand exhaustion."

The FTC contends that the merger of the companies, including Coach and Michael Kors under the same ownership, would result in a dominant position in the bag market, allowing them to increase prices for customers while providing inferior products.

Tapestry and Capri's attorneys have challenged the FTC's portrayal of a unified handbag market, arguing that competition has intensified as customers now evaluate both high-end luxury brands and affordable fast-fashion options, and can easily shop from online-only retailers and secondhand marketplaces.

The trial is happening amidst consumer resistance to high prices and the anticipation of a change in the federal agency's strategy following the outcome of the closely watched U.S. presidential election.

The decline in shares of Capri, which includes Michael Kors, reflects the tougher stretch that the designer Kors described. As of Monday afternoon, the company's stock has fallen about 24% so far this year, trailing far behind the roughly 18% gains of the and the approximately 17% rise of Tapestry.

In the most recent fiscal quarter ending in late June, Michael Kors experienced a 14.2% decline in revenue on a reported basis or a 13.3% decrease on a constant currency basis compared to the previous year.

As an industry veteran, Kors remains a student of the fashion industry and draws inspiration from spending time on store floors, talking to customers or people-watching at places such as airports. He must move nimbly even as he continues to learn.

He discovered Aupen, a new entrant in the handbag industry, when he saw a photo of Taylor Swift carrying one of their bags. When he visited their website, it crashed, he stated.

He stated, "This demonstrates the strength of women in such a manner."

On Monday, former CEO Jeff Gennette stated that retailers also experience the impact of brand loss. Gennette, who retired early this year, revealed that Macy's sales suffered due to the store's overreliance on Michael Kors' brand. He explained that the markdown of Michael Kors' handbags contributed to a negative spiral that Macy's was going through during his tenure.

The antitrust trial is predicted to end on Tuesday with the presentation of economic experts, including one representing the FTC and one representing the companies.