Following the news that the CMA has blocked JD Sports’ proposed purchase of Footasylum:
Pippa Stephens, Retail Analyst at GlobalData, a leading data and analytics company, offers her view on the situation:
“Following the CMA’s ruling, Footasylum will no longer be able to piggyback upon JD Sports’ success in the market, with the latter having reported impressive UK growth in recent years, making headway on key competitors like Sports Direct. The footwear specialist may not prove to be strong enough to stand on its own two feet in the future, given the impact of COVID-19.
The UK clothing & footwear market is forecast to decline by 30.1% in 2020 as a result of the COVID-19 pandemic, with footwear expected to be the worst performing of the two sectors. Footasylum is likely to be experiencing a severe decline in demand, despite trainers being a more desirable footwear category, as consumers primarily go outside for exercise during lockdown. While its abundance of products from the likes of Nike and Adidas will satisfy consumers’ desire for branded items, Footasylum also continues to face added pressure as direct-to-consumer channels become more dominant.”