The competition regulator has blocked the takeover of Footasylum by JD Sports, saying that the only way to address its concerns is to sell to an approved buyer.
JD Sports reacted furiously after the Competition and Markets Authority (CMA) made its final decision on the £ 90m deal 14 months later take control was first agreed.
The watchdog ruled that a “substantial lessening of competition” “would leave buyers with less discounts or
receive substandard customer service. “
Kip Meek, who chaired the investigation group, said: “Our investigation has analyzed a large body of evidence showing that JD Sports and Footasylum are close competitors.
“This agreement would mean the withdrawal of a direct competitor from the market, worsening the situation for customers.
“Based on the evidence we’ve seen, blocking the deal is the only way to guarantee their protection. “
JD maintained its position throughout the investigation after the determination that the CMA did not understand the market and confirmed that it was considering a request for reconsideration.
The company said competitors such as Mike Ashley’s Sports Direct used the investigation process “for their own business interests” while traveling to “compete more closely” at the same time.
Peter Cowgill, Executive Chairman of JD, said: “We fundamentally disagree with the CMA’s decision, which continues to be based on an inaccurate and outdated analysis of the competitive sports retail landscape in the UK. Uni, and is supported by obsolete and erroneous customer surveys.
“At the same time, incredibly, the AMC was won over by the selfish testimony of a notoriously vocal competitor, who made numerous public announcements confirming their continued investment in their elevation strategy and who clearly participated in the process of their own commercial interests rather than for the benefit of consumers. “
Footasylum has more than 50 premises in the UK and employs 2,500 people.
When the business was purchased, it was part of a chain of chains struggling with high costs and low consumer confidence on the main street – before coronavirus was even known.
It operated as a separate entity before the CMA decision.
All of the group’s stores were closed when the UK foreclosure started and Cowgill took a voluntary 75% cut in salary as part of larger efforts to save money.