JD Sports Fashion : "perplexed" by Footasylum merger block
September 02, 2021 at 03:30 am EDT
Share
JD Sports is “perplexed” and “disappointed” after the CMA announced a preliminary decision to block its planned purchase of Footasylum following an appeal.
Kip Meek, chair of the group conducting the inquiry, said that the deal “would see Footasylum bought by its closest competitor,” which could lead to a worse shopping experience for customers facing higher prices, a smaller range of products and less discounts.
Peter Cowgill, Executive Chairman of JD Sports Fashion Plc, said that he was “perplexed and again disappointed” by the decision. He urged the CMA “to reconsider its position before making its final determination.”
The news comes after the company appealed the CMA’s previous ruling prohibiting the acquisition in May 2020.
JD Sports said it “remains committed to its transaction goal” and questioned the CMA’s findings.
The company accused the competitions watchdog of failing to adequately account for the expanding role of major brands, Nike and Adidas, in the trainers market. JD Sports pointed out that the rise of online shopping during the pandemic meant Nike and Adidas were making the bulk of their sales directly to customers rather than sending stock to outlets.
Cowgill said: “we have made compelling submissions on the committed positioning of the global brands towards Direct to Consumer and the consequent impact on an extremely competitive marketplace.”
The CMA is taking views on its provisional report until 16 September and possible remedies by 9 September. The authority said it will assess all evidence before making a final decision.
JD Sports’ share price is trading up 0.048 per cent today.
Read more: JD Sports’ merger with Footasylum edges nearer after appeal
The post The CMA reaches provisional decision to block JD Sports merger appeared first on CityAM.
JD Sports Fashion Plc is a United Kingdom-based multichannel retailer of sports, fashion and outdoor brands. The Company specializes in the sale of sports fashion and outdoor footwear and apparel, combining global brands such as Nike, adidas, Puma and The North Face, with own brand labels such as Pink Soda and Supply & Demand. The Company's segments include Sports Fashion and Outdoor. Its sports fashion brands include JD, Size?, Footpatrol, Finish Line, Shoe palace, DTLR, Livestock, Sprinter, Sport Zone, Perry Sport and Sizeer. Its outdoor brands include Go Outdoors (GO), Blacks, Millets, Tiso, Ultimate Outdoors, Fishing Republic and Naylors. Its Finish Line is a retailer of multi-branded athletic footwear, apparel and accessories in the United States. Shoe Palace is a retailer of branded sports footwear and apparel located on the West Coast of the United States and has over 160 stores, which trade under the Shoe Palace banner.