Capri Holdings (CPRI), the parent company of Michael Kors and Jimmy Choo, saw shares plunge around 45% in after-hours trading on Thursday after a US judge blocked its pending $8.5 billion merger with Coach owner Tapestry (TPR).

In a court filing obtained by Yahoo Finance, US District Judge Jennifer Rochon ruled that "antitrust has come into fashion," arguing a merger between the two fashion powerhouses "will substantially lessen competition in the market for accessible-luxury handbags."

Tapestry and Capri had announced their proposed merger last year. The combination would have brought together six high-profile fashion brands under one roof: Tapestry’s Coach, Stuart Weitzman, and Kate Spade with Capri’s Versace, Jimmy Choo, and Michael Kors.

Shares of Tapestry moved in the opposite direction of Capri in the aftermath of the news, rising roughly 13%.

In a statement released Thursday evening, Tapestry said it plans to appeal the decision, adding, "Tapestry and Capri operate in an industry that is intensely competitive and dynamic, constantly expanding, and highly fragmented among both established players and new entrants.

"We face competitive pressures from both lower- and higher-priced products and continue to believe this transaction is pro-competitive and pro-consumer."

The Federal Trade Commission had moved to block the acquisition in April, seeking a preliminary injunction to stop the deal. That injunction was granted by Rochon on Thursday.

At the time, the agency had argued a merger would "[threaten] to deprive consumers of the competition for affordable handbags, while hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions."

Tapestry fought back against those claims, arguing a merger was necessary in order to compete against dominant European players like Gucci.

The ruling blocks the merger while the FTC goes forward with its proceedings, but all parties will still have the chance to argue their case before the FTC.

Prior to Thursday's ruling, Pauline Brown, former North American chair at LVMH, which owns fashion brands like Louis Vuitton and Dior, told Yahoo Finance the FTC would face a "high hurdle" in making its case.

"The trickiest part of their legal argument is that there is a natural market ... for what they are calling accessibly priced luxury handbags," she said at the time. "The reality is, I think it's a spectrum."

She added it's "a feeble argument" to say consumers will be hurt by higher prices because "the customers, if they're happy, they'll still come at the right price, for the right designs. And if they're not, they're going to go to another player."