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JD Sports: 'Footasylum deal will not hurt competition'

JD Sports has hit out at claims that its proposed merger with rival Footasylum would damage competition on the high street.

The retailer has said that although it has “carefully considered” warnings from watchdog the Competition and Markets Authority (CMA), it believes the plans will not reduce competition in the clothing and footwear market.

The potential acquisition has set alarm bells ringing for the CMA, which argued earlier this month that it could lead to higher prices, worse choice and poorer service for shoppers. The watchdog has confirmed it will now refer JD Sport’s acquisition of Footasylum to a phase two investigation.

In a statement, JD Sports said: “JD’s commercial success rests on its global in-store and online offerings being compelling to both consumers and its brand partners. The acquisition of 70 Footasylum stores in the UK does not affect this commercial reality and does not adversely impact the competitive landscape. Consumers and brand owners can and do exercise choice across a wide range of large and sophisticated multi-channel and online retailers, both in the UK and internationally, with the major brands increasingly selling their products direct to consumers through their own sales channels.

“The challenging UK retail market provides many examples of retailers who have either suffered or been unable to survive because they have not met the rapidly evolving requirements of consumers and brand owners. Indeed, JD’s rationale for carrying out this acquisition was to retain Footasylum’s position as a multichannel retailer, both on the UK high street and online, while ensuring that Footasylum’s diverse and complementary offer remains available to its consumers.”

JD Sport’s executive chairman Peter Cowgill added: “The CMA has referred their review of this acquisition to phase two 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.”

JD Sports agreed to buy Footasylum in a deal that valued the company at £90.1m in March this year.

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