After a more in-depth review of JD Sports Fashion’s acquisition last year of the Footasylum chain in the U.K., Britain’s Competition and Markets Authority (CMA) announced on May 6 its decision to block it, arguing that it would lead to a “substantial lessening of competition nationally,” with higher prices and less service for customers. In view of the coronavirus epidemic, the anti-trust authority said that JD should be given sufficient time to re-sell Footasylum.
To back up its claim that the two chains should be allowed to continue to compete against each other, the CMA cited a survey of 10,000 customers showing that JD would be the best alternative for two-thirds of them if they were not be able to shop at a Footasylum store. Responding to the CMA’s decision, JD issued a strong statement where it “fundamentally disagrees,” noting among other things that the competition in the market has become more intense with the coronavirus lockdown. It claims it will continue after the crisis is over with more physical stores closing down because of the growing DTC efforts of the big brands, placing smaller retailers with few online resources like Footasylum at risk. It added that few buyers would be likely to rush to take it over, aside from Mike Ashley’s Sports Direct, and that they might want to pare it down. JD said it will consider a formal challenge of the CMA’s ruling in the Competition Appeal Tribunal.