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JD Sports responds to media reports of alleged Footasylum meeting

By Rachel Douglass

Nov 8, 2021

Business

Image: JD Sports Facebook

Sportswear retailer JD Sports Fashion plc has released a response to media reports that its executive chairman Peter Cowgill had been holding meetings with Footaslyum’s chairman, Barry Bown, possibly in breach of competition rules.

Initially reported by The Sunday Times, video footage released back in July shows Cowgill and Bown sitting in a car, located at Manchester’s Bridge Hall industrial park. Taken by a third-party source, the retailer is now looking into who took the video, stating it as a “potentially illegal covert surveillance”.

It criticised the media outlet for not reporting “in a more balanced way”.

As part of its response, the JD noted Cowgill has known Bown “on a business and personal basis for over 25 years”, stating that it is not unusual, suspicious or illegitimate for the two to meet from time to time, “including in relation to the ongoing review by the Competition and Markets Authority (CMA)”.

It affirmed that the CMA had been fully informed on the content and reasoning for the meeting in July, asserting that it “believes that its actions in participating in this meeting do not amount to wrongdoing or a breach of the Order”, referring to the Interim Enforcement Order for which JD is to take steps to encourage key staff of Footasylum to remain within the business.

“Any suggestions with regard to Corporate Governance breaches are totally refuted,” the retailer added, further remarking that stakeholders are aware that the company treats governance matters seriously and transparently.

Ongoing battles

The response comes as JD Sports has been ordered to sell Footaslyum by the CMA, which suggested that the acquisition could be a “worse deal” for customers.

The organisation began investigating the 90 million pound acquisition of Footasylum after it was announced back in May 2019, following the CMA’s inquiry into a possible breach of its rules in regards to the takeover.

Since the announcement, JD has been blocked from integrating Footasylum or preventing the two from competing against one another.

In an update on Thursday last week, the CMA found that the takeover of Footasylum would reduce competition even after taking into account the growth of online shopping. Survey results indicated by the CMA suggested that Footasylum has a weakened relative to JD Sports acquisition, concluding that it felt it was in customers best interest for JD to sell its counterpart.

In an interview with the BBC, CMA’s chairman, Kip Meek, said: “We strongly believe shoppers could suffer if Footasylum stopped having to compete with JD Sports. It is likely they would pay more for less choice, worse service and lower quality.”