CMA fines JD Sports, Footasylum £4.7m for breaching order

The CMA said on Monday that during two meetings, which took place on 5 July and 4 August last year, JD Sports chief executive Peter Cowgill and Footasylum CEO Barry Bown exchanged commercially sensitive information and then failed to alert the watchdog.

During these meetings, they discussed Footasylum’s issues with stock allocations from key brands, information about Footasylum’s financial performance and the planned closure of 6 Footasylum stores. They also talked about Footasylum’s contract negotiations with its transport and delivery provider and contract negotiations for the renewal of Footasylum’s head office space, the CMA said.

It added that both CEOs have claimed they could not remember what had been discussed during the meetings.

Kip Meek, chair of the inquiry group investigating the merger, said: "There is a black hole when it comes to the meetings held between Footasylum and JD Sports. Both CEOs cannot recall crucial details about these meetings. On top of this, neither CEO or JD Sports’ General Counsel can provide any documentation around the meetings - no notes, no agendas, no emails and poor phone records, some of which were deleted before they could be given to the CMA.

"Had there been proper safeguards in place, we would have been alerted to these breaches in good time and would have had the necessary information to tackle them head on.

"It jeopardised our ability to maintain the benefits of a competitive market for shoppers and ensure there is a level playing field for other businesses. This fine should act as a warning - if you break the rules there will be serious consequences."

JD Sports bought smaller rival Footasylum in 2019 for £90m. However, in November, the CMA ordered JD to sell Footasylum after an in-depth investigation identified competition concerns.

It said at the time that over the course of its investigation, it found that JD Sports was "by far and away" the closest alternative for shoppers at Footasylum.

"The CMA expects this will continue to be the case even after taking into account the continued growth in online shopping, including on the websites and apps of brands such as Nike and Adidas," the CMA said.

At 0920 GMT, JD shares were down 2.9% at 169.54p.