JD Sports could be looking into selling Footasylum to Aurelius Group, a private equity investor, following a lengthy battle with a UK competition watchdog.
According to a report by Sky News, the sportswear retailer has entered into exclusive talks with Aurelius to sell the Footasylum chain, although the terms of the potential deal are currently unclear.
A source for the publication, from one of Footasylum’s losing bidders, said that the nature of the order from the Competition and Markets Authority (CMA) meant that JD Sports’ status as a forced seller could reduce the price it had hoped to obtain for the chain.
It comes after a costly tussle between JD Sports and CMA, which fined both the retail group and Footasylum nearly five million pounds, earlier this year, for sharing commercially sensitive information.
The battle began in 2019, when JD bought Footasylum for 90 million pounds, an acquisition that was later investigated by the CMA after it found the two companies breached its order.
CMA also said that the bosses failed to report the breaches, impacting its ability to “swiftly stop the information from being shared further”.
In November 2021, the organisation ordered JD Sports to sell Footasylum, ruling that the merger between the two sportswear retailers would “leave shoppers worse off”.
Following the ruling, JD Sports’ executive chairman Peter Cowgill and Footasylum CEO Barry Brown further breached CMA rules by meeting in a car park, as reported by the Sunday Times.
The Lancashire-based company has also faced more scrutiny from the CMA in regards to the sale of Rangers FC merchandise alongside Elite Sports.
According to the watchdog, the duo may have broken competition law by illegally price-fixing certain merchandise and carrying out anti-competition behaviour.
The investigation is still taking place, with each party allowed to make representations to the CMA before the final decision is made.