JD Sports sells Footasylum to private equity firm after watchdog crackdown
Trainer seller JD Sports has inked a deal to hand over Footasylum to Aurelius Group for £37.5m, following competition concerns.
In recent weeks, JD Sports had been rumoured to be in talks with the German private equity group about selling the high street brand, which it attempted to takeover in 2019.
JD said the sale was “anticipated to complete in the coming weeks with no conditionality,” in an update on the London Stock Exchange on Monday morning.
The London-listed footwear seller had made a £90m bid for the smaller firm but in autumn 2021 the Competition and Markets Authority (CMA) demanded JD Sports sell Footasylum.
The CMA had argued the takeover could slash competition and result in a worse deal for Footasylum customers.
At the time, former chair Peter Cowgill dubbed the decision “inexplicable”.
“I would like to sincerely thank the teams at AURELIUS and Footasylum who worked collaboratively with the CMA to agree this transaction,” Kath Smith, interim CEO of JD, said on Monday.
“We wish both parties every success for the future,” she added.
Regis Schultz, a former top dog at B&Q, has been touted to step into Cowgill’s shoes as CEO, after his departure last month.
Cowgill left the firm after almost two decades at the helm of the retailer, over boardroom disagreements about succession and corporate governance.
Cowgill’s departure follows JD Sports and its rival Footasylum being slapped with multi-million pound fines after Cowgill met with Footasylum’s opposite number Barry Brown in a car park to discuss a blocked takeover.
The Competition and Markets Authority (CMA) issued a £4.7m fine after it claimed the two bosses shared commercially sensitive information in the meetings and failed to put proper safeguards in place to prevent rules breaches.
For failing to have safeguards in place, JD Sports was instructed to pay £2.5m and Footasylum £200,000 while JD Sports was fined £1.8m and Footasylum £180,000 for sharing commercially sensitive information, and then failing to alert the CMA.
D Sports was also caught in the crosshairs after admitting to cartel activity over fixing retail prices of some Rangers Football Club branded clothes.
Earlier this year, the CMA said it had provisionally found that Elite Sports and JD Sports fixed the retail prices of a number of Rangers-branded replica kits and other clothing products from September 2018 until at least July 2019.
JD Sports said it intended to recognise a provision of approximately £2m, which was its “best estimate of the liability payable in respect of this matter,” including legal fees.