Tapestry Inc.’ stock jumped 6.8% early Thursday, while Capri Holdings Inc.’s stock fell about 4%, after Tapestry said it’s terminating its $8.5 billion merger agreement with its smaller rival.

Shares of Coach and Kate Spade parent Tapestry jumped Thursday morning while those of Michael Kors and Versace owner Capri Holdings fell after they called off their planned merger over ongoing legal challenges.

The proposed merger that would've combined six luxury brands owned by Capri and Tapestry was abandoned by the companies due to regulatory challenges posed by an FTC lawsuit.