The deal will be completed in the coming weeks, ending a saga that began with the £90m purchase of rival JD Sports in 2019 as the FTSE 100 group sought to strengthen its position on the UK high street. The UK’s Competition and Markets Authority (CMA) had significant concerns from the outset that the takeover of Rochdale-based Footasylum, which has 63 UK stores, would reduce competition. However, JD Sports, which has 3,400 stores in the UK, North America and other markets, mounted a notable challenge to the regulator’s authority by successfully arguing in 2020 that the CMA had acted “unreasonably” by failing to consider the impact of the pandemic of the coronavirus in the market. However, the CMA backtracked and in September 2021 again found that competition on price, quality, range and service levels in footwear and apparel could be reduced if the takeover went ahead. JD Sports reacted furiously at every stage of the process. Its former chief executive, Peter Cowgill, argued the deal would not reduce competition because more and more potential customers were looking online to buy trainers directly from brands such as Nike, Adidas and Puma, which supply and compete with JD Sports and Footasylum. However, Cowgill stepped down in May – 18 years after becoming the company’s chief executive – following a boardroom row over the separation of the roles of chairman and chief executive, which he held. His resignation came just months after JD and Footasylum were fined almost £5m for sharing commercially sensitive information during the competition investigation. Cowgill and his Footasylum counterpart Barry Brown were filmed secretly meeting in a car park during the CMA investigation. The CMA also said phone records were deleted. JD Sports tried to strike a more softening tone on Monday, saying it “worked with the CMA throughout the divestment process”, including checking that the new buyer was acceptable. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Kath Smith, interim chief executive of JD Sports, said: “I would like to sincerely thank the Aurelius and Footasylum teams for working with the CMA to agree this transaction. We wish both parties every success for the future.” Dirk Markus, founding partner of Aurelius, said it would work with Footasylum to increase its online sales and develop “the brand’s offerings”. He said: “As a standalone business, Footasylum has the potential to become an innovative sportswear retailer and we look forward to unlocking the company’s full potential.”
