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Anger at watchdog

JD Sports chairman refusing to accept CMA ruling

JD Spiorts in St James

The leisurewear chain said the ruling ‘defied logic’ (pic: Terry Murden)

JD Sports chairman Peter Cowgill has reacted angrily after a final ruling from the competition watchdog that it must sell the Footasylum chain it bought for £90m in 2019.

The Competition and Markets Authority said the merger would mean that Footasylum would no longer face competition from JD Sports so customers would have fewer options and could face higher prices, fewer discounts, and less choice of products in-store

JD said the latest ruling “defied logic” and it was considering its options. Analysts believe that means the battle has further to go.

“Peter Cowgill’s blood is boiling,” said AG Bell investment director Russ Mould.

“He has been fighting the competition authority for some time, arguing that even after absorbing Footasylum into JD there still is plenty of competition in this sector, particularly from shoe manufacturers which are increasingly selling direct to consumers.

“The shoe market is well served by a range of retailers in the UK, so it does seem odd that the CMA is being so stubborn.

“JD Sports is unlikely to let the CMA have the final word and it now seems that Cowgill is on a personal mission to emerge victorious. It’s now a fight of principles and not letting the CMA set the precedent for future cases of a similar ilk.

“Cowgill wants fair treatment in this fight and is unlikely to stand down, given that the statement says JD is studying its options.”

The CMA had been ordered to look at the issue again after criticism from a competition appeals tribunal that it had failed to take the impact of the COVID-19 pandemic into account – shifting consumer purchases online and even direct from manufacturers.

The regulator said: “Over the course of its inquiry, the CMA found that JD Sports is by far and away the closest alternative for shoppers at Footasylum.

“The CMA expects this will continue to be the case even after taking into account the continued growth in online shopping, including on the websites and apps of brands such as Nike and adidas.”

Mr Cowgill said it was not fair for the CMA to conclude that “JD would have an incentive to worsen the offer in Footasylum to the detriment of both consumers and suppliers.

“Overall, the CMA’s decision today continues to be inexplicable to anyone who understands what difference the pandemic has made to UK retail and how competition and the supply chain in our markets actually work.

“It is deeply troubling at a time when the UK high street has been seriously damaged already and is vulnerable to further closures.”

At 1.30pm shares in JD Sports were trading 27p (2.49%) higher at 1110.5p.



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