JJB’s sale faces scrutiny of the retail watchdog

 
Kasmira Jefford
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SPORTS Direct’s proposed takeover of JJB Sports’ 180 stores is likely to come under investigation by the competition watchdog once the acquisition has already taken place.

The sportswear giant founded by Newcastle United owner Mike Ashley remains one of the frontrunners to buy the struggling retailer, although it is said to be interested in less than half of the stores.

But the deal faces potential scrutiny from the Office of Fair Trading (OFT) and Sports Direct may be forced to shed several of JJB Sports’ stores in areas where it already has a dominant market position.

A source familiar with the process yesterday warned that even if the merger goes ahead without an investigation the OFT may look into the case “retrospectively”.

The OFT declined to comment.

JJB Sports was forced to put itself up for sale in July after battling with falling sales and failing to secure fresh funds from investors.

Accountanting group KPMG is handling the sale process, which is expected to be completed this week ahead of an imminent rent bill.

Any deal is expected to involve a pre-pack administration – where a buyer is lined up before a formal administration process – leading to several store closures and putting jobs at risk.

Irish consortium Stafford Group has also launched a late bid for JJB Sports, while JD Sports and JJB Sports founder Dave Whelan pulled out of talks last week.