Frasers Group, the parent company of popular retailers such as Sports Direct, House of Fraser, and Flannels, has expressed strong interest in acquiring Footasylum, a rival retailer that is currently up for sale by its competitor JD Sports Fashion. The move comes after the Competition and Markets Authority (CMA) instructed JD Sports to sell Footasylum in order to maintain fair competition in the market.

According to the CMA ruling, if customers of Footasylum, a footwear retailer, were unable to shop there, around 40% of them would likely turn to JD Sports as an alternative. This figure is significantly higher than any other retailer, highlighting the potential impact of the merger on competition in the market.

Frasers Group has reportedly notified the CMA of its intention to make an offer for Footasylum. However, any potential buyer must obtain approval from the regulator to ensure compliance with competition guidelines. This presents a potential risk for Frasers, as its Sports Direct business is already a major player in the market.

JD Sports, which acquired Footasylum for £90 million in March 2019, had been considering appealing against the CMA ruling. However, recent reports suggest that JD Sports is likely to give up its battle to retain ownership of Footasylum.

When the CMA’s decision was initially announced, JD Sports criticized the regulator, describing the merger blockage as illogical and accusing the CMA of being influenced by JD’s main competitor. JD Sports has chosen not to comment further on the matter, while Frasers has not yet responded to requests for comment.

The CMA has assured that any new purchaser of Footasylum will be required to operate as a “fully independent competitor,” ensuring that fair competition is maintained in the market. However, it remains uncertain which potential buyers apart from JD Sports are being considered by the CMA.

Useful links:
1. JD Sports Response to CMA Update
2. CMA Case on JD Sports and Footasylum Merger