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Frasers Group offers to buy Footasylum from JD Sports

// Chairman of Frasers Group Mike Ashley has offered to buy retail chain Footasylum from rival JD Sports
// Last month, the CMA ordered JD to sell Footasylum and its 65 stores – arguing the takeover could harm competition

Sports Direct parent Frasers Group is reported to have made an offer for Footasylum, following the Competitions & Markets Authority’s (CMA) decision to force its rival JD Sports to sell the chain.

The developments are the latest chapter in the power struggle between Britain’s two biggest trainer tycoons: Ashley who owns Frasers which includes Sports Direct, and Peter Cowgill, executive chairman of JD.

JD Sports was ordered to sell Footasylum’s 65 stores by the CMA in November, after the watchdog ruled that JD’s purchase of the smaller chain of trainer shops would result in a worse deal for shoppers.

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Following an investigation, the CMA said that Footasylum was “by far and away” the closest rival to JD Sports and said that a survey it had carried out revealed that 50 per cent of shoppers would go to JD Sports if they were unable to shop at Footasylum.

JD Sports argued that the survey failed to take into account online competition, including that from major sports brands’ own channels and argued that Footasylum’s market share was less than 5 per cent.

The regulator must approve the new purchaser to ensure it is a truly independent competitor – unless JD Sports successfully appeals against the ruling.

Sports Direct parent Frasers Group is reported to have made an offer for Footasylum, following the Competitions & Markets Authority’s  (CMA) decision to force its rival JD Sports to sell the chain.

According to The Sunday Times, Mike Ashley’s group has approached JD Sports with the offer and has informed the CMA of its intention.

Sports Direct, which specialises in value sportswear and sports goods, is understood to believe there is less crossover between it and Footasylum, which is known for high-end trainers.

JD Sports’ Peter Cowgill commented at the time: “The CMA rightly concludes that, following the acquisition of Footasylum, JD would have no incentive to raise prices or worsen its offer as its most important competitors are the DTC operations of the international brands themselves.

“However, the CMA has then somehow concluded that the competitive threat from DTC does not extend to Footasylum and that JD would have an incentive to worsen the offer in Footasylum to the detriment of both consumers and suppliers. We would suggest that the CMA is in a minority of one in reaching this conclusion.

“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.”

Neither JD nor Frasers has issued a statement on the situation, while the CMA has told The Sunday Times that any purchaser would need to commit to running a “fully independent competitor”.

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The post Frasers Group offers to buy Footasylum from JD Sports appeared first on Retail Gazette.



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