Loss of JD Sports’ expertise leaves Footasylum’s future in question, says GlobalData

Following today’s news (4 November) that the CMA has blocked JD Sports’ acquisition of Footasylum;

Darcey Jupp, Retail Analyst at GlobalData, a leading data and analytics company, offers her view:

“The CMA’s final decision to block JD Sports’ acquisition of Footasylum 18 months after the initial purchase will be a blow to JD Sports, which has fought to prove the purchase would not disadvantage consumers and reduce competition in the UK sportswear market. While JD Sports will continue to succeed without Footasylum on its books after record H1 results in FY2021/22 with group revenue up 52.7%, the CMA’s decision will be detrimental to Footasylum as a smaller player in the market.

“This now raises questions about the future of Footasylum. The retailer struggled during the pandemic as its revenue fell 6.7% in FY2020/21, while many of its competitors flourished due to the increased demand for athleisure, including JD Sports’ sports fashion division which grew 2.0% in the same period. Any new buyer for Footasylum will have to work hard to ensure that the retailer can keep up with the pace of the fast-growing UK sportswear market, which GlobalData forecasts to increase by 23.4% between 2020 and 2025.

“Prior to JD Sports’ acquisition, Frasers Group would have likely been keen to add Footasylum to its portfolio, however such a purchase would almost certainly also be blocked due to Sports Direct’s similar dominance in the market. After its recent flurry of acquisitions, the boohoo group could be possible bidders, as this would give it a step in the door to the sports market, and its online expertise could help bring Footasylum back to life. However, the group’s usual strategy of heavy discounting could raise concerns with key brands Nike and Adidas, which Footasylum needs to keep on side to ensure its success.”

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