Feb 27, 2020

Sports Direct puts boot into JD Sports over Footasylum tie-up

Sports Direct has suggested that the UK competition regulator appoint a trustee to sell Footasylum to an industry bidder, such as itself, rather than leave its bitter rival JD Sports to run a disposal process. The Competition and Markets Authority ruled earlier this month that the already-completed takeover of Footasylum by JD Sports was likely to lead to less competition, and said selling Footasylum "May be the only way of addressing these concerns". It has consistently argued that the combination of JD and Footasylum would be anti-competitive because of JD Sports' considerable influence with footwear brands such as Nike and Adidas. Although Sports Direct has more than 400 stores in the UK, the CMA said in its report that its wider product range and discount image meant it was less of a competitive constraint on JD in footwear than an independent Footasylum with fewer than 100 stores. US-listed Foot Locker, which has 70 stores in the UK, was also regarded as a greater competitive threat to JD than Sports Direct, according to the CMA. Sports Direct further suggested that the CMA appoint a "Divestiture trustee" to run a Footasylum disposal process because JD Sports would not have sufficient incentive to complete a sale quickly.

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