The UK’s Competition and Markets Authority (CMA) said on Wednesday it issued a £300,000 fine to Bury-based retail giant JD Sports Fashion and its biggest shareholder Pentland Group for allegedly breaching an order relating to the attempted acquisition of Footasylum Ltd.
The CMA said JD Sports and Pentland failed to comply with its enforcement order when Footasylum closed a store in Wolverhampton.
JD Sports said it disagreed with the CMA’s decision and is considering its options.
It said any breach had been made by Footasylum without JD’s knowledge.
The CMA in May blocked JD Sports’ attempted takeover of Footasylum, saying it would “leave shoppers with fewer discounts or receiving lower quality customer service”.
JD Sports is appealing the decision.
A JD Sports spokesman said: “We strongly disagree with the CMA’s decision to fine JD Sports for an alleged breach of the ‘hold-separate’ order.
“The terms of the order legally oblige JD and Footasylum to be operated as separate businesses by separate management teams, with the consequent alleged breach relating to an independent decision made by Footasylum management without JD’s knowledge or involvement.
“We are carefully considering our options.”
Pentland Group, which owns brands including Speedo, Canterbury, Berghaus and Lacoste Chaussures, is a major shareholder of JD Sports with a stake of more than 50%.
The CMA said it “ … has decided to impose to impose a penalty on Pentland and JD Sports under section 94A of the Enterprise Act 2002 (EA02) because it considers that Pentland and JD Sports have, without reasonable excuse, failed to comply in certain respects with the requirements imposed on them by the initial enforcement order issued by the CMA under section 72 of the EA02 on 17 May 2019 (the IEO) …
“The CMA finds that JD Sports and Pentland failed to comply with the IEO by not procuring that: a) except with the CMA’s prior written consent or in the ordinary course of business for the separate operation of the Pentland business and the Footasylum business, none of the assets of the Footasylum business were disposed of; and b) each of their subsidiaries (including Footasylum) complied with the IEO as if the IEO had been issued to each of them.”