The competition regulator has blocked the JD Sports takeover of Footasylum, saying the only way to address its concerns is for a sale to an approved buyer.
JD Sports reacted with fury after the Competition and Markets Authority (CMA) delivered its final decision on the £90m deal, 14 months after the takeover was first agreed.
The watchdog ruled that a "substantial lessening of competition" would "leave shoppers with fewer discounts or
receiving lower quality customer service".
Kip Meek, who chaired the inquiry group, said: "Our investigation analysed a large body of evidence that shows JD Sports and Footasylum are close competitors.
"This deal would mean the removal of a direct competitor from the market, leaving customers worse off.
"Based on the evidence we have seen, blocking the deal is the only way to ensure they are protected."
JD maintained its position throughout the investigation, after the ruling was delivered, that the CMA did not understand the market and confirmed that it was considering an application for a review.
The company claimed that competitors, such as Mike Ashley's Sports Direct, had used the investigation process "for their own commercial interests" while moving to "compete more closely" at the same time.
Peter Cowgill, JD's executive chairman, said: "We fundamentally disagree with the CMA's decision, which continues to rely on an inaccurate and outdated analysis of the UK sports retail competitive landscape, and is underpinned by outdated and flawed customer surveys.
"At the same time, incredibly, the CMA has been taken in by the self-serving testimony of one notoriously vocal competitor, who has made numerous public announcements confirming their ongoing investment in their elevation strategy and who has blatantly participated in the process for their own commercial interests rather than for the benefit of consumers."
Footasylum has more than 50 premises in the UK and employs 2,500 staff.
At the time the company was bought it was among a clutch of chains struggling amid high costs and weak consumer confidence on the high street - before coronavirus was even known about.
It was operating as a separate entity ahead of the CMA's ruling.
All group stores were closed when the UK lockdown began and Mr Cowgill took a voluntary 75% cut in his salary as part of wider efforts to save cash.
https://news.google.com/__i/rss/rd/articles/CBMiX2h0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L2pkLXNwb3J0cy1vcmRlcmVkLXRvLXNlbGwtZm9vdGFzeWx1bS1hcy10YWtlb3Zlci1pcy1ibG9ja2VkLTExOTgzNzg40gFjaHR0cHM6Ly9uZXdzLnNreS5jb20vc3RvcnkvYW1wL2pkLXNwb3J0cy1vcmRlcmVkLXRvLXNlbGwtZm9vdGFzeWx1bS1hcy10YWtlb3Zlci1pcy1ibG9ja2VkLTExOTgzNzg4?oc=5
2020-05-06 06:21:15Z
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