LONDON, Sept 20 (Reuters) - British sporting goods retailer
Sports Direct said on Friday an antitrust investigation
into rival JD Sports Fashion's takeover of Footasylum
could have implications for the sector's major players,
particularly their relationships with "must-have" brands.
Key suppliers to the industry include Nike, Adidas
, Puma and Under Armour.
In July the Competition and Markets Authority (CMA) launched
an investigation into JD Sports Fashion's completed 90
million pound acquisition of smaller rival Footasylum.
The regulator said on Thursday it planned to refer the deal
to a deeper phase 2 investigation after finding it could lead to
a worse deal for customers due to higher prices, poorer choice
in stores or reductions in service quality.
It said JD must address its concerns or face the more
in-depth probe.
Sports Direct, which is led by founder Mike Ashley, said it
had received legal advice that the issues identified by the CMA
regarding brand relationships are likely to be a key focus of
any phase 2 investigation.
It said the issues are likely to have wider market
implications beyond this transaction "as they appear to
highlight the power of the 'must-have' brands and potential
market-wide practices aimed at controlling the supply and,
ultimately, the pricing of their products".
Sports Direct said it would continue to work constructively
with all of its third-party suppliers.
Analysts said Sports Direct has long been irked by the major
brands favouring JD Sports with their best ranges.
They said that as Sports Direct is pursuing what it calls
its "elevation" strategy, seeking to get more access to the
major brands' latest and higher tier products, it was in its
interests to stir things up with the regulator.
Shares in Sports Direct were up 1.2% at 0741 GMT, while JD
was up 0.3%.
(Reporting by James Davey; Editing by Jan Harvey)
