Mike Ashley has complained to the Competition and Mergers Commission that the acquisition of Footasylum by JD Sports will restrict his company’s share of leading sports footwear brands.
His Sports Direct firm has been reviewing the CMA’s decision, published last week, to refer the completed acquisition by JD Sports Fashion plc of Footasylum to a Phase II investigation. Sports Direct claim that the CMA has published inaccurate estimates of market share for “sports-inspired casual apparel and also footwear”.
The Sports Direct CEO said: “I have been watching this from the side lines to date and now having had the opportunity of considering the CMA decision, I would now welcome the opportunity to provide the CMA with the correct market data. For example, our market share of Adidas Originals in Sports Direct is virtually zero.”
The CMA had found that the acquisition is likely to result in ‘a worse deal for customers, both in-store and online, through higher prices, worse choice in stores or reductions in service quality.’
The merging businesses are two of a small number of firms who have the brand relationships with major brands and market presence to be able to credibly meet the demands of sports fashion customers.
Sports Direct notes the CMA decision has acknowledged that Sports Direct has a ‘differentiated product offering’ from JD Sports and Footasylum and has experienced a ‘lack of access to exclusive and high-end premium products’.
Sports Direct disagrees with the market share estimates claiming they substantially overstate its presence in each of the markets which are the subject of the CMA’s investigation. The company said it welcomes the opportunity for these percentages to be corrected during the course of the Phase II investigation.