NEW YORK, Sept 10 (Reuters) -

Fashion holding company Tapestry has room to raise

prices and lower discounts on rival Capri's Michael

Kors brand if the companies merged, a top Tapestry executive

testified on Tuesday as regulators sought to block the $8.5

billion deal.

Tapestry's brands include Coach, Kate Spade and Stuart

Weitzman while Capri also owns Jimmy Choo and Versace.

On the second day of a trial in federal court in the

Southern District Court of New York, the Federal Trade

Commission presented slides to support its claim that the merger

would lead to higher prices by ending competition between the

rivals.

The slides included Tapestry's internal consumer research

deck sent to CEO Joanne Crevoiserat in 2022 by Elizabeth Harris,

senior vice president for global strategy and consumer insights.

"Coach has been priced on average $147 above Michael Kors

for the last two years," a title in the slide deck read,

suggesting room to increase Michael Kors' average unit retail

price.

Harris responded that she saw the opportunity to raise

prices because of the gap between what consumers pay for Coach

and Michael Kors handbags, including taxes and fees.

However, that did not imply Tapestry would hike prices, she

said, noting other factors such as brand creative work, design,

and material costs in setting prices. Pricing also depends on

how Tapestry executes these actions and the brand's

desirability, she added.

Another slide showed Harris suggesting that Tapestry could

reduce the levels of discounting on Kors' products.

The two slides omitted the additional cost factors when it

was presented to Crevoiserat, Harris admitted. "This was just a

quick data pull we had at the time and didn't dictate what could

happen."

Harris said the deck resulted from Crevoiserat's directive

to research market dynamics and identify suitable merger and

acquisition targets, a process that began around mid-2022. She

noted that the slides were created by someone on her team and

were part of a "touch base" meeting with Crevoiserat in August

2022. She said she never saw the deck again after sending it to

Crevoiserat.

Tapestry said it does not comment on pending litigation. It

pointed Reuters to its pretrial statement that evidence will

show that the proposed merger will benefit consumers.

The trial, overseen by District Judge Jennifer Rochon, is

expected to end on Wednesday next week, with closing statements

on Sept. 30.

A ruling could take anywhere between one to three months

after that, lawyers for Tapestry said.

(Reporting by Siddharth Cavale in New York)