JD Sports has said it “strongly disagrees” with the Competition and Market Authority (CMA) that its proposed £90m takeover of Footasylum would be “bad for customers”, as it now faces a full-scale investigation into the deal.
Following the CMA’s Phase 1 decision of 19 September 2019, JD said it has “carefully considered” the watchdog’s observations, but said it “firmly believes” that there is clear evidence that the acquisition “would not result in a substantial lessening of competition in the relevant clothing and footwear retail markets where the two businesses operate”.
In light of the content of the CMA’s full Phase 1 decision, JD has informed the CMA that it does not consider that there are any appropriate remedies that can be offered at this time to avoid a reference to Phase 2 being made. The CMA has therefore confirmed today that the transaction will be referred to a Phase 2 investigation.
The sports fashion retailer argues its success rests on its global in-store and online offerings being “compelling” to both consumers and its brand partners, and that the acquisition of 70 Footasylum stores in the UK “does not affect this commercial reality and does not adversely impact the competitive landscape”.
Peter Cowgill, executive chairman of JD Sports Fashion, said: “The CMA has referred their review of this acquisition to Phase 2 on the basis that it could be bad for competition and may have an impact on price.
“I strongly disagree with this. 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, multichannel experience to our consumers by offering a compelling product proposition.”