The CMA has provisionally found JD Sports’ takeover of Footasylum could lead to a worse deal for shoppers, after reassessing the merger.
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 (Tribunal), which remitted the case back to the CMA for reconsideration. Having gathered extensive additional evidence on the impact of coronavirus (COVID-19) and other developments in the sports fashion sector, the Competition and Markets Authority (CMA) has reached the provisional view that the merger could result in a worse deal for Footasylum shoppers throughout the UK.
This means customers could find themselves facing higher prices, fewer discounts and less choice of products in store. It could also result in the merged company investing less in improvements to customer service.
At this stage, the CMA’s view is that blocking the deal, by requiring JD Sports to sell Footasylum, may be the only way of addressing these competition concerns.
Kip Meek, chair of the group conducting this inquiry, said “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. 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.”
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