Britain’s largest sportswear retailer JD Sports (JD.L) must sell Footasylum, a UK watchdog said on Thursday after a second investigation found the combination could leave consumers worse off even after considering stiff online competition amid the pandemic.
However, the CMA said that the evidence it has analysed showed that the two companies are adapting well to market conditions and they would still thrive should the merger not go ahead.
“The pandemic may have altered the way we shop but innovative businesses, driven by healthy competition, will rise to the challenge and successfully cater to changing tastes and habits,” CMA Chair of the inquiry group Kip Meek said in a statement on Thursday.
JD Chairman Peter Cowgill said the regulator’s decision on Thursday remains “inexplicable” to anyone who understood how the pandemic has affected UK retail.
“It is deeply troubling at a time when the UK high street has been seriously damaged already and is vulnerable to further closures,” Cowgill added.
JD has six weeks to send to the CMA their promise to sell Footasylum, a process that the CMA will oversee, or the British regulator will put in place a legally enforceable order.
The retailer said it was studying the report in detail and would carefully consider its options. It has a four week window to appeal the decision if it wishes to do so.