CMA blocks JD Sports’ takeover of Footasylum
The Competition and Markets Authority has blocked JD Sports Fashion’s £90 million takeover of Footasylum after deciding that the move would lead to a “substantial lessening of competition”.
The CMA said the deal would leave shoppers with fewer discounts and “lower quality customer service”. The body also said that it had seen no evidence that the impact of the coronavirus pandemic would remove its competition concerns.
Kip Meek, chair of the CMA inquiry group, stated: “Our investigation analysed a large body of evidence that shows JD Sports and Footasylum are close competitors. This deal would mean the removal of a direct competitor from the market, leaving customers worse off. Based on the evidence we have seen, blocking the deal is the only way to ensure they are protected.”
JD Sports agreed a deal to buy Footasylum last year but has now been told by the CMA that it must be given “sufficient time in which to sell Footasylum” to an approved buyer.
In a statement issued today, JD Sports said it disagreed with the decision and is considering whether to appeal.
Peter Cowgill, chairman of JD Sports said: “We fundamentally disagree with the CMA’s decision, which continues to rely on an inaccurate and outdated analysis of the UK sports retail competitive landscape, and is underpinned by outdated and flawed customer surveys.
“At the same time, incredibly, the CMA has been taken in by the self-serving testimony of one notoriously vocal competitor, who has made numerous public announcements confirming their ongoing investment in their elevation strategy and who has blatantly participated in the process for their own commercial interests rather than for the benefit of consumers.
“When the CMA published its provisional findings in February, we said at the time that they demonstrated a complete misunderstanding of our market to an alarming extent. Today, and equally frustratingly, in the midst of a global pandemic and with the UK high street in a state of complete lockdown, the CMA’s final decision is even more absurd.”
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