JD Sports Fashion has acquired a stake of 18 percent in 8,676,878 shares of Footasylum, the U.K.-based retailer of sneakers and sports apparel. JD announced first that it had bought 8.3 percent of the shares, but then Footasylum said that JD's stake had risen to more than 18 perent. Reportedly, it bought the first batch at a price of 50 pence a share from an institutional investor. The initial announcement sent up Footasylum's distressed share price up by more than 60 percent, giving it a market capitalization of more than £50 million (€57m-$65m).

JD Sports stressed in a statement that it views the purchase as an investment and that it is prepared raise its stake to 29.9 percent, the maximum level beyond which it would have to make a bid for the balance of the shares. It added that it does not plan to take a controlling interest in the chain, with its owners' consent, unless a third party makes an offer for the company or if is the chain becomes the target of a reverse takeover or some other maneuver.

Evidently, the Rubin family, which controls JD Sports Fashion through its Pentland Group, wants to prevent a takeover of Footasylum by JD's equally acquisitive arch-rival, Sports Direct International, or another investor. It did the same in 2005 when Pentland acquired an initial stake of 45 percent in the former JD Sports for £45 million (€52m-$58m) from John Wardle and David Makin, who had founded the chain in 1981. Pentland subsequently raised its stake in JD to 57 percent and led it through a spate of acquisitions including most lately The Finish Line in the U.S.

History is repeating itself in significant ways. Footasylum was created in 2005, immediately after the initial transfer of ownership, by one of JD's founders, David Makin. He was joined four years later by John Wardle, who served as the chain's chief executive between 2008 and 2015, when he was made executive chairman. Makin's 30-year-old daughter, Clare Nesbitt, took over the management in 2016.

Footasylum, which operates 70 stores and an online shop, has just gotten through a rough Christmas season, during which it cut prices to raise revenues and clear inventories. The company's sales did indeed rise by 14 percent to £102.3 million (€117.1m-$132.1m) over the 18 weeks through Dec. 29. In January, the company stated that its full-year earnings would likely end up at the bottom of analysts' forecasts (SGI Europe Vol. 30 N° 1+2 of Jan. 11, 2019).