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JD Sports completes forced sale of Footasylum… and loses £50million 

JD Sports completes forced sale of Footasylum after merger is blocked… and loses £50m

  • The sportswear giant was ordered by competition watchdog to sell its smaller rival for fear the tie would make shoppers worse off
  • JD paid £90 million for Footasylum in 2019 and said yesterday it had agreed to sell the company to German private equity firm Aurelius Group for £37.5 million

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JD Sports has lost more than £50 million on the forced sale of Footasylum after their merger was blocked.

The sportswear giant was ordered by the competition watchdog to sell its smaller rival for fear the band would make shoppers worse off.

JD paid £90 million for Footasylum in 2019 and said yesterday it had agreed to sell the company to German private equity firm Aurelius Group for £37.5 million.

JD Sports lost over £50million on the foreclosure of Footasylum after their merger was blocked

JD Sports lost over £50million on the foreclosure of Footasylum after their merger was blocked

The deal ends a long-running battle between JD and the Competition and Markets Authority over Footasylum. The CMA warned that the merger could lead to less competition and hit customers.

The company maintained that the acquisition would be good for consumers and that Footasylum would collapse without it. Through the acquisition, JD, with 405 stores in the UK, would have acquired Footasylum’s 65 stores in the UK.

Despite two years of pleas and appeals, the CMA ordered JD to sell the company. The acquisition of Footasylum also contributed to the demise of Executive Chairman Peter Cowgill, who led JD for 18 years.

He was ousted in May as the retailer tried to put behind a string of corporate governance scandals under Cowgill. Last July, he was filmed holding a secret meeting in a car park near Bury with Footasylum boss Barry Bown – despite the two not being allowed to share commercial information.

The CMA found that they had violated the divorce warrant and beat them with a combined fine of £4.7 million. Russ Mold, AJ Bell’s investment director, said the acquisition was a “costly mistake” for JD, both financially and reputationally.

Mold said: “Events surrounding the doomed transaction contributed to the departure of Executive Chairman Peter Cowgill, after a highly successful tenure, and damaged the company’s reputation for good governance.”

Aurelius manages assets worth £850m and founding partner Dirk Markus said yesterday: ‘Footasylum has long been a staple of the High Street and go-to shop for customers seeking high-end branded sportswear. As a standalone company, it has the potential to become an innovative sportswear retailer and we are eager to unlock the company’s full potential.”

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