‘Defies logic’ JD Sports blast regulator over order to sell Footasylum

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The Competition and Markets Authority revealed they had found JD Sports was the closest alternative for shoppers to Footasylum. Fifty percent surveyed said they would go to JD Sports if unable to shop at Footasylum for clothing with 43 percent making the switch for footwear. The CMA say these figures are substantially higher than for any other retailer. Footasylum was purchased by JD Sports in April 2019 however the CMA believe selling it is now the only way to protect customers who otherwise could see higher prices, fewer discounts and less choice of products in-store.

Kip Meek, chair of the CMA inquiry group said: “The UK boasts a thriving sports fashion market and today’s decision reflects our commitment to keeping it that way.”

“We strongly believe shoppers could suffer if Footasylum stopped having to compete with JD Sports. It is likely they would pay more for less choice, worse service and lower quality.”

Footasylum is currently in good financial health posting underlying profits of £29.3million for the year, up from £25.5million in 2019/20.

Mr Meek added: “The evidence we have analysed shows that JD Sports and Footasylum are adapting well to market conditions and would continue to be profitable should the merger not go ahead.”

“As separate, rival entities, these companies can continue to compete for shoppers online and as they return to the high street.”

JD Sports, however, have responded saying the decision “defies logic” arguing that Footasylum represents less than five percent of the market with JD’s most important competition now direct to consumer sales from Nike and Adidas.

Nike now aims for direct sales to represent 60 percent of its business by 2025.

It’s currently on almost 40 percent for the last financial year, up from 15 percent a decade ago.

Boss of JD Sports Peter Cowgill said the CMA was “in a minority of one” in its conclusions.

He added: “Overall, the CMA’s decision today continues to be inexplicable to anyone who understands what difference the pandemic has made to UK retail and how competition and the supply chain in our markets actually work.”

“It is deeply troubling at a time when the UK high street has been seriously damaged already and is vulnerable to further closures.”

The CMA first raised concerns about the merger back in 2019 and launched an inquiry.

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However, at the end of 2020, it was asked to go back and reconsider its findings in view of the impact of the pandemic and the shift in retail to online sales.

Unless JD Sports successfully appeals the CMA will oversee the sale and approve the new purchaser to ensure Footasylum is run by a fully independent competitor.

JD Sports said it would consider its options accordingly.

Express.co.uk contacted JD Sports for comment. 

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