The UK’s competition watchdog has found JD Sports’ takeover of Footasylum could lead to a worse deal for shoppers, after a reassessment of the merger.
The Competition and Markets Authority (CMA) said blocking the deal, by requiring JD Sports to sell the footwear brand, may “be the only way” to address its concerns.
The authority warned the deal could result in customers facing higher prices, fewer discounts, less choice of products in store, and could lead to the company investing less in improvements to customer service.
Following the CMA’s final decision to block the merger between JD Sports and Footasylum in May 2020, JD Sports appealed to the Competition Appeal Tribunal, which remitted the case back to the CMA for reconsideration.
“Since our original inquiry, we have gathered a significant amount of additional evidence, including on the impact of coronavirus, and we still have concerns about JD Sports’ takeover of Footasylum,” said Kip Meek, chair of the group conducting the inquiry. “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.”
He added that JD Sports, Footasylum, and others in the retail sector now have an opportunity to give the CMA their views on the provisional decision and the suggestion to block the deal.
The CMA will assess all evidence provided before making a final decision.
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