JD Sports condemns ‘fundamentally flawed’ CMA decision on Footasylum

The CMA has said that there are competition concerns over the sports fashion retailers’ tie-up, but Cowgill said that analysis is ”fundamentally flawed”.

JD Sports said: “The CMA’s provisional findings do not reflect the intensive and dynamic competitive reality of the UK sports retail market today, where a large number of retailers selling third-party brands compete not only with each other, but also with major online pureplayers and, most importantly, the increasingly powerful direct to consumer operations of the international brands themselves.

“The CMA has failed to recognise and accept clear evidence of the rapidly changing nature of this market, which has materially altered even during the period of the CMA’s review.”

The retailer said it rejected the suggestion that a deal might mean “there could be fewer discounts and less choice in stores and online” and that “the CMA has lost sight of its objective to protect consumer interests”.

JD maintained: “We still firmly believe that bringing Footasylum into the group will deliver significant benefits for both consumers and the UK high street, and we will continue to make our case strongly to the CMA in the coming weeks.”

Cowgill said: “The CMA’s provisional decision is fundamentally flawed and demonstrates a complete misunderstanding of our market to an alarming extent given its six-month review.

“The competitive landscape described by the CMA is one which neither I, nor any experienced sector analyst, would recognise. Just take a walk down any major UK high street or search for Nike or Adidas trainers on Google and you can see for yourself how competitive this marketplace really is.

“The CMA’s provisional findings do not reflect the objective evidence, with excessive weight being placed on surveys asking hypothetical questions of a small sample of selected customers equivalent to less than 25% of the footfall of one JD store in Manchester for one week, rather than assessing the reality of how consumers actually shop on a national scale.

“When the group made its offer in March 2019, it was our intention to support Footasylum and its employees to grow the business and increase the quality, range and choice of products available to customers.

“We remain convinced that a combination of the two businesses would provide significant long-term benefits to customers, colleagues and brand partners, while maintaining Footasylum’s presence on the high street as the music-inspired casual retailer which it is today.”