A federal judge on Thursday blocked Tapestry Inc.’s planned $8.5 billion acquisition of Capri Holdings, agreeing with regulators that the deal would hurt competition in the handbag industry.

A federal court judge has blocked the proposed merger between Tapestry-owned Coach and Capri parent Michael Kors. The reasoning behind the judge's order wasn't immediately clear but the FTC had previously argued the merger would harm consumers, raise prices and reduce employee benefits.

A federal court sides with the FTC, which argued that a Tapestry-Capri merger would raise prices for handbags.

A federal judge blocked Tapestry's acquisition of Capri on Thursday following a brief trial last month in New York. In her order, Judge Jennifer Rochon granted the Federal Trade Commission's motion for a preliminary injuction to block the proposed merger,

A federal judge blocked Tapestry’s acquisition of rival Capri, dealing a blow to their ambitions to create a house of brands that would include Coach, Kate Spade, Michael Kors, Versace and Jimmy Choo.