The UK’s competition watchdog has warned that JD Sports’ move to acquire Footasylum for £90m could hurt competition on the high street, referring it for a further investigation.
The Competition and Markets Authority (CMA) has referred the proposed acquisition for a phase two investigation, after revealing it was “concerned” that the deal could lead to a loss of competition.
The CMA said the purchase “could result in a worse deal for customers, both in-store and online, through higher prices, worse choice in stores or reductions in service quality”. It said JD Sports “must now address the concerns identified or face a further, more in-depth, investigation”.
Peter Cowgill, executive chairman of JD Sports Fashion, commented: “We continue to believe that Footasylum would be a positive addition to the group, bringing a differentiated customer demographic and fashion-led product range that is complementary to our existing business. We also believe that there will be significant operational and strategic benefits from a combination of the two businesses.
“Our discussions with the CMA are ongoing as we consider whether to proceed to “Phase 2” or if acceptable remedies can be agreed at this stage. We look forward to working constructively with the CMA in this regard and will provide further updates in due course.”