JD Sports given six weeks to sell Footasylum by UK competition regulator

JD Sports, which sells brands such as Nike, Adidas and Puma in its physical and online stores, has argued the pandemic has only increased competition, as global brands expand their direct-to-consumer businesses.

Britain's largest sportswear retailer JD Sports must sell sports trainer retailer Footasylum, the UK’s competition regulator has ruled, after a second investigation found the combination could leave consumers worse off even after considering stiff online competition amid the pandemic.

The UK’s Competition and Markets Authority (CMA) started investigating JD Sports' £86m (€101m) purchase of Footasylum in 2019 and ordered it to unwind the merger in May last year.

JD successfully appealed that decision, with the regulator considering the impact of the pandemic on shopping habits as it reassessed its findings.

However, the CMA said that the evidence it has analysed showed that the two companies are adapting well to market conditions and they would still thrive should the merger not go ahead.

The ruling does not impact either retailer in Ireland. While JD Sports has shops here, Footasylum sells online from the UK and has no shops. As a result, no notification was made to the Competition and Consumer Protection Commission here.

"The pandemic may have altered the way we shop but innovative businesses, driven by healthy competition, will rise to the challenge and successfully cater to changing tastes and habits," CMA chair of the inquiry group Kip Meek said.

JD Sports, which sells brands such as Nike, Adidas and Puma in its physical and online stores, has argued the pandemic has only increased competition, as global brands expand their direct-to-consumer businesses.

JD chairman Peter Cowgill said the British regulator's decision remains "inexplicable" to anyone who understood how the pandemic has affected UK retail.

JD has six weeks to send to the CMA their promise to sell Footasylum, a process that the CMA will oversee, or the British regulator will put in place a legally enforceable order.

- Reuters and Irish Examiner