JD Sports has agreed a £38m deal to sell Futaslim to German asset management firm Aurelius Group, after it was eventually forced by the UK’s competition watchdog to take down the trainer series.
The deal will be completed in the coming weeks, ending a saga that began in 2019 with its rival’s £90m purchase of JD Sports, as the FTSE 100 group sought to strengthen its position on the UK’s High Street. Had it.
The UK’s Competition and Markets Authority (CMA) was concerned from the start that the acquisition of Rochdale-headquartered Footsilm, which has 63 UK stores, would reduce competition. However, JD Sports, which operates 3,400 stores in the UK, North America and other markets, successfully challenged the regulator’s authority in 2020 by arguing that the CMA acted “irrationally” by not considering the impact of the coronavirus pandemic. Market.
Yet CMA returned, and in September 2021 it was found again that competition on price, quality, range and service levels on footwear and clothing could still be low if the acquisition goes ahead.
JD Sports reacted furiously at every stage of the process. Its former chief executive, Peter Cowgill, argued that the deal would not reduce competition as more and more potential customers were looking online to buy trainers directly from brands such as Nike, Adidas and Puma, which supply to JD Sports and Futsilum. and compete.
However, Cowgill resigned in May – 18 years after becoming the company’s chief executive – following a boardroom bust-up related to the sharing of the roles of chairman and chief executive, both of which he had.
His resignation comes just months after JD and Footasylum were fined nearly £5m for sharing commercially sensitive information during a competition investigation. Cowgill and his counterpart in Futasilum, Barry Brown, were filmed meeting secretly in a car park during the CMA investigation. The CMA also said that the phone records were deleted.
JD Sports attempted to take a softer tone on Monday, saying it “cooperated with CMA throughout the divestment process”, including checking that the new buyer was acceptable.
Cath Smith, Interim Chief Executive of JD Sports, said: “I would like to sincerely thank the teams at Aurelius and Futasilum who worked closely with CMA to agree to this transaction. We wish every success for the future of both sides. Wish.”
Aurelius founding partner Dirk Marcus said he will work to increase Futsilum’s online sales and develop “its own brand offerings.”
He added: “As a standalone business, Footasylum has the potential to become an innovative retailer of sportswear and we look forward to unlocking the full potential of the company.”