Competition watchdog ruling on JD Sports’ £90 million takeover of Footasylum ‘fundamentally flawed’

JD Sports chief executive, Peter Cowgill, said the Competition and Markets Authority (CMA) had shown an ‘alarming misunderstanding’ of the sports market after the body said the £90 million takeover could leave customers worse off.

And Mr Cowgill also blasted the CMA for taking six months to make the provisional ruling as part of its in-depth Phase 2 investigation.

JD Sports agreed to acquire Footasylum in April last year, but the CMA has warned it may have to sell up if its concerns if its concerns are not adequately addressed.

JD Sports has stores in Carlisle, Workington and Barrow, while Footasylum has a shop in Carlisle.

Kip Meek, chairman of the independent inquiry group leading the investigation, said: “We're currently concerned that shoppers could lose out after the merger, for example through fewer discounts and less choice in stores and online.

“This could particularly affect younger customers and students, who shop in JD Sports and Footasylum."

JD Sports now have two weeks to put forward possible remedies, but the CMA added that its ‘current view is that blocking the deal by requiring JD Sports to sell the Footasylum business may be the only way of addressing these competition concerns’.

JD Sports hit back at the decision, saying the findings ‘do not reflect the intensive and dynamic competitive reality of the UK sports retail market today’ and that it had ‘failed to recognise and accept clear evidence of the rapidly changing nature of this market, which has materially altered even during the period of the CMA's review’.

Mr Cowgill added: “The competitive landscape described by the CMA is one which neither I, nor any experienced sector analyst, would recognise. Just take a walk down any major UK high street or search for Nike or adidas trainers on Google and you can see for yourself how competitive this marketplace really is.”

A final report will be published by May 11.