Last checked at 1 Oct 2019 07:03
01 October 2019
JD Sports Fashion Plc
Update on CMA review of Footasylum acquisition
JD Sports Fashion Plc (JD) today provides a further update following the Competition and Markets Authority's (CMA) review into JD's acquisition of Footasylum.
Following the CMA's Phase 1 decision of 19 September 2019, JD has carefully considered the CMA's observations and its claims that the acquisition of Footasylum would give rise to a realistic prospect of a substantial lessening of competition.
JD firmly believes that there is clear evidence that the acquisition would not result in a substantial lessening of competition in the relevant clothing and footwear retail markets where the two businesses operate.
In light of the content of the CMA's full Phase 1 decision, JD has informed the CMA that it does not consider that there are any appropriate remedies that can be offered at this time to avoid a reference to Phase 2 being made. The CMA has therefore confirmed today that the transaction will be referred to a Phase 2 investigation.
JD has, and will, continue to co-operate fully with the CMA in its review to firmly establish that both JD and Footasylum operate in an extremely competitive and dynamic retail market and that they will continue to face strong competition following the acquisition.
JD's commercial success rests on its global in-store and online offerings being compelling to both consumers and its brand partners. The acquisition of 70 Footasylum stores in the UK does not affect this commercial reality and does not adversely impact the competitive landscape. Consumers and brand owners can and do exercise choice across a wide range of large and sophisticated multi-channel and online retailers, both in the UK and internationally, with the major brands increasingly selling their products direct to consumers through their own sales channels.
The challenging UK retail market provides many examples of retailers who have either suffered or been unable to survive because they have not met the rapidly evolving requirements of consumers and brand owners. Indeed, JD's rationale for carrying out this acquisition was to retain Footasylum's position as a multichannel retailer, both on the UK high street and online, while ensuring that Footasylum's diverse and complementary offer remains available to its consumers.
Peter Cowgill, Executive Chairman of JD Sports Fashion Plc, commented:
"The CMA has referred their review of this acquisition to Phase 2 on the basis that it could be bad for competition and may have an impact on price. I strongly disagree with this. This transaction will not result in any price increases or a reduction in product ranges or service quality. The focus of all of our Group businesses is to ensure we deliver a best in class, multichannel experience to our consumers by offering a compelling product proposition."
Enquiries:
JD Sports Fashion Plc Tel: 0161 767 1000
Peter Cowgill, Executive Chairman
Neil Greenhalgh, Chief Financial Officer
MHP Communications Tel: 0203 128 8788
Andrew Jaques
Giles Robinson
Nessyah Hart
Charles Hirst