JD Sports' Footasylum buy back on as CMA decision is overturned
In a rare reversal, JD sports has been able to overturn the Competition and Markets Authority's decision to block its £90 million takeover of Footasylum.
The Competition Appeal Tribunal has agreed with JD Sports that the CMA “acted irrationally”, failing to properly assess the likely impact of the pandemic on its decision to block the takeover. And it said it hadn't fully understood how the ability of big-name sports brands to sell direct to consumers online these days has changed the sports retail market.
So what happens now? The CMA will have to reconsider its decision, while the order it made back in May forcing JD sports to divest Footasylum will be cancelled.
JD Sports executive chairman Peter Cowgill said the company had always maintained that the takeover would provide long-term benefits to a wide variety of stakeholders, including brand partners, staff and customers.
He added that the company will be presenting further evidence to demonstrate "the true extent to which the competitive landscape has evolved, in particular as a result of the unprecedented challenges caused by the Covid-19 pandemic”.
It's perhaps no surprise that the decision has been reversed in this most unusual of years as the environment around sports and fashion retail has changed beyond all recognition.
And with smaller retailers sometimes faced with an existential threat due to the pandemic, the authorities will be much more conscious of how precarious their situations are as independent businesses compared to just a year ago.
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