(qlmbusinessnews.com via bbc.co.uk – – Mon, 1st Aug 2022) London, Uk – –
Sportswear chain JD Sports has lost millions of pounds after being forced to sell Footasylum, three tumultuous years after buying the retailer.
JD Sports has offloaded Footasylum for £37.5m, far less than the £90m price it paid in 2019.
JD Sports was forced to sell the business after the takeover was blocked by the UK's competition watchdog.
It is being bought by private equity firm Aurelius, which owns Lloyds Pharmacy.
The Competition and Markets Authority (CMA) had ruled the merger could lead to less choice and a “worse deal” for customers.
Earlier this year JD Sports and Footasylum were fined almost £4.7m by the CMA for sharing commercially sensitive information during its investigation. The boss of JD Sports, Peter Cowgill, resigned from the company in May after the fine.
JD admitted “inadvertently” breaking the rules over the sharing of commercially sensitive information.
However, it has described the decision to block the takeover as “inexplicable”.
In July 2021 Mr Cowgill was filmed meeting his counterpart at Footasylum, Barry Brown, at a car part near Bury in Greater Manchester, first revealed by in a report in the Sunday Times.
The CMA found that during two meetings on 5 July and 4 August 2021 the two bosses had exchanged commercially sensitive information and then failed to alert the regulator.
It said neither men could provide documentation around the meetings, with “no notes, no agendas, no emails and poor phone records, some of which were deleted before they could be given to the CMA”.
JD denied phone records had been deliberately deleted and accused the regulator of “inflammatory language”.
JD has more than 900 stores across 21 countries, selling brands such as Nike, Adidas and Puma.
Footasylum, which has more than 65 stores across the UK, sells similar sportswear brands.
However, announcing the merger in 2019, JD said the two businesses would complement each other because its target audience is slightly younger than Footasylum's focus on 16 to 24-year-olds.
The two companies have a shared history – JD Sports co-founder David Makin established Footasylum in 2005.