JD Sports has defended reports that its executive chairman met with Footasylum boss amid an ongoing competition watchdog review.
The footwear giant’s executive chairman Peter Cowgill met with Footasylum chief Barry Bown, in a car park near Bury in Greater Manchester, this summer, in footage seen by the Sunday Times.
JD Sports said in a statement: “It is disappointing that the Sunday Times has not reported in a more balanced way on the highly irregular and potentially illegal covert surveillance undertaken by a third party for their own interests.
“JD hopes that a regulator, tasked with acting in the wider public interest, is able to more critically regard the actions of the third party for what they are.”
The Competition and Markets Authority’s (CMA) has been looking at trainer giant JD’s takeover of smaller rival Footasylum since spring 2019.
The watchdog’s initial enforcement order bans the two firms from an integration of Footasylum into JD.
While it does not prohibit meetings, the watchdog said “no business secrets, know-how, commercially sensitive information, intellectual property or any other information of a confidential or proprietary nature” can be shared.
Both parties denied any wrongdoing.
According to a source close to Cowgill, quoted in The Sunday Times, the duo met in the car park as a nearby cafe was shut and no business secrets were shared.
Cowgill suggested the video had been taken on behalf of a “key competitor”. He told the newspaper: “I’m not concerned by the footage in terms of any implications of business wrongdoing or incorrect conduct. But I am concerned – very – that a competitor is able to go to those lengths.”
CityA.M. understands the CMA is in the process of investigating whether the meeting constituted a breach of its interim order.
Every fortnight, the bosses of the two footwear firms and JD’s majority shareholder, Pentland Group, must write to the CMA to assure the watchdog that they have not breached the order.
Compliance taken seriously
The CMA said: “These rules are put in place to protect consumers and other businesses operating in that market as we investigate a merger. We take compliance very seriously and thoroughly investigate any potential breaches. Where there is clear evidence that a breach has occurred, we do not hesitate to take action.”
JD said: “The brief meeting between Peter Cowgill and Barry Bown on July 5 was arranged in order to discuss Barry’s future involvement in the Footasylum business, a personal issue in relation to a family member of Mr Bown known to Mr Cowgill, and to reassure JD that Footasylum was doing everything it separately could to assist in obtaining CMA merger clearance.
“These are legitimate topics. The CMA is fully aware of this and other conversations having taken place.”
The watchdog instructed JD Sports to ditch its takeover of Footasylum this week, which the retailer pushed back against.