Competition watchdog imposed £300k fine over ‘rules breach’ during takeover process
Bury-based JD Sports and its biggest shareholder, Pentland Group, have been fined £300,000 by the Competition and Markets Authority (CMA).
The censure relates to JD’s £90m takeover of Rochdale-based Footasylum in March 2019.
However, in September, the CMA ruled the deal anti-competitive.
It imposed an enforcement order on the companies, which, among other things, banned them from making any changes to Footasylum’s portfolio of stores without prior permission.
However, when a Footaslym store in Wolverhampton was closed in October, the CMA said this breached the order.
A trustee who monitors the process found out that Footasylum was planning to close the store and warned them to ask for permission first.
But, says the CMA, the next day Footasylum served a break notice with its landlord, without telling the trustee or asking for the regulator’s permission.
Issuing the fine, the CMA said the parties had “without reasonable excuse, failed to comply in certain respects with the requirements imposed on them by the initial enforcement order issued by the CMA”.
JD Sports said it strongly disagreed with the decision, and is “carefully considering our options”.
It said any potential breach had been made by Footaslym, without its knowledge.
In a statement, it said: “We strongly disagree with the CMA’s decision to fine JD Sports for an alleged breach of the ‘hold-separate’ order.
“The terms of the order legally oblige JD and Footasylum to be operated as separate businesses by separate management teams, with the consequent alleged breach relating to an independent decision made by Footasylum management without JD’s knowledge or involvement.
“We are carefully considering our options.”
In May this year the CMA blocked JD’s takeover of Footasylum. The sports and athleisurewear retailer is considering an appeal.