JD Sports faces full-scale competition probe into Footasylum buy
JD Sports Fashion has insisted its £90 million takeover of high street rival Footasylum will not be bad for shoppers as it faces a full-scale probe by the competition watchdog.
The Competition and Markets Authority (CMA) said it was set to refer the planned acquisition for an in-depth phase two investigation after JD Sports failed to offer any solutions to ease its concerns by the 26 September deadline.
It comes after the CMA warned last month that the deal could lead to “higher prices, less choice and a worse shopping experience for customers”.
But JD Sports hit back, saying it “strongly disagrees” with the CMA’s fears.
Peter Cowgill, executive chairman of JD Sports, said: “This transaction will not result in any price increases or a reduction in product ranges or service quality.
“The focus of all of our group businesses is to ensure we deliver a best in class, multi-channel experience to our consumers by offering a compelling product proposition.”
JD Sports added that it will continue to co-operate fully with the CMA. It first revealed plans for the takeover in March, having built up its stake in troubled Footasylum.
JD Sports is the UK’s largest sportswear retailer after recently overtaking Sports Direct to become the biggest on the high street. It has more than 400 stores and also owns other retail brands such as Size?.
Footasylum, which first opened in 2006, now has 70 stores in the UK and generated revenues close to £200 million in 2018. But it has suffered a challenging time, warning over profits twice in the past year, blaming tough trading conditions on the high street, which has sent its shares tumbling.
Sports Direct, led by retail tycoon Mike Ashley, has expressed its opposition to the acquisition saying it had taken legal advice and believes the deal could lead to Sports Direct getting less access to top brands from Nike and Adidas.