Sports Direct says CMA figures 'wrong' in Footasylum probe
Sports Direct International issued a response to a Competition and Markets Authority (CMA) decision to refer the completed acquisition by JD Sports Fashion of Footasylum to a phase 2 investigation on Wednesday.
The competition regulator announced its decision to progress the investigation on 24 October.
In its announcement the CMA said it had found that the acquisition was 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”.
It explained that “the merging businesses are two of a smaller number of firms who have the brand relationships and market presence to be able to credibly meet the demands of sports fashion customers”.
Sports Direct said on Wednesday, that in its decision, the CMA acknowledged that Sports Direct had a “differentiated product offering” from JD Sports and Footasylum, and had experienced a “lack of access to SMUs/exclusive and/or high-end/premium products”.
However, despite those findings, Sports Direct said that the CMA had published “inaccurate estimates” of its share of the supply of “sports-inspired casual apparel and also footwear”, both on an in-store and online basis.
It said the regulator had “wrongly suggested” that Sports Direct would have a comparable share of supply to the merged parties.
Sports Direct said it had disagreed with those estimates, as they “substantially overstate” its presence on each of the markets which were the subject of the CMA's investigation.
It said it did not have a “meaningful, if any” presence in those markets for the reasons articulated by the CMA.
Sports Direct told the market that it would “welcome the opportunity” for those percentages to be corrected during the course of the CMA's phase 2 investigation.
“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,” said Sports Direct chief executive officer Mike Ashley.
“For example, our market share of Adidas Originals in Sports Direct is virtually zero.”
As at 1150 GMT, shares in Sports Direct International were down 3.34% at 307.59p.