JD Sports ‘perplexed and disappointed’ by merger concerns
JD Sports has said it is “perplexed and disappointed” by concerns over its planned takeover of sports goods rival Footasylum.
There are concerns that the merger will mean shoppers could face higher prices or less choice.
But JD Sports’ boss said the deal would boost a “high street decimated by a number of high-profile closures.”
The Competition and Markets Authority (CMA) first blocked the £90m takeover last year.
It was forced to reconsider its decision after an appeal from the sportswear retailer.
The competition watchdog said it has now gathered extra evidence on the impact of the pandemic and the sports fashion sector, and still has concerns over the proposed takeover.
“This deal would see Footasylum bought by its closest competitor and, as a result, shoppers could face higher prices, less choice and a worse shopping experience overall,” said Kip Meek, chair of the group conducting the CMA inquiry.
“While many stores were closed during lockdown, online sales in this market have been stronger than ever, and revenue from in-store sales is rebounding as people return to the High Street.”
Big brands such as Nike and Adidas have started to sell more of their products directly to customers – potentially cutting out the like of JD Sports. But the CMA said “these developments are still not enough to replace the very significant degree of competition between JD Sports and Footasylum.”
In response to the provisional findings, JD Sports accused the CMA of failing to take into account the “structural shift in favour of online shopping” that was seen during the pandemic.
“I am not sure what further evidence the CMA needs to appreciate the extent of this dynamic change which has been substantially accelerated by Covid-19,” said JD Sports executive chairman Peter Cowgill.
“If the CMA’s mission is indeed to ‘make markets work well in the interests of consumers, businesses and the economy’ then I urge the CMA to reconsider its position before making its final determination.”
JD Sports and Footasylum now have the opportunity to share their views on the new findings by 16 September before the CMA makes its final decision.
The CMA’s said that it believed both companies would continue to m\ke profit should the merger not happen.
FOLLOW US ON SOCIAL MEDIA AND SHARE WTX NEWS WITH YOUR FRIENDS AND FAMILY:
Facebook – Please like our page
Twitter – Twitter updates available in English and Arabic. Please follow us and we would love to hear from you
Instagram – Follow our pages in English and ArabicLeave a comment