NEW YORK — Fashion company Tapestry announced Thursday that it is scrapping its proposed merger with Capri because the two luxury groups do not expect to overcome an antitrust challenge in an acceptable time frame.

The companies reached an $8.5 billion deal in August 2023 that would have united Capri, the maker of Versace, Jimmy Choo and Michael Kors shoes, handbags and accessories, with Tapestry, which makes the same products under from Coach, Kate Spade New York, and Stuart Weitzman brands.

But this agreement encountered many obstacles.

In April, the Federal Trade Commission sued to block Tapestry’s acquisition of Capri, saying the deal would eliminate direct competition between the companies’ brands in the area of ​​affordable luxury handbags.

The FTC also alleged that the deal threatened to eliminate the two companies’ incentive to compete for employees and could drive down wages and benefits. The Tapestry and Capri combination would have employed about 33,000 people worldwide, the agency said.

Last month, a U.S. district judge stopped the merger, saying it would reduce competition and harm consumers.

Tapestry and Capri filed a notice to jointly appeal the decision, but Tapestry said Thursday that the outcome of the legal proceedings was “uncertain and unlikely to be resolved by the February 10, 2025 deadline.”

Shares of Capri slipped 4.6% in premarket trading.