JD Sports sells Footasylum for cut-price £37.5m

Bury-based FTSE 100 retailer JD Sports Fashion plc announced it sold Rochdale-based Footasylum to German investment group Aurelius — taking a big loss on a deal that was retrospectively blocked by the UK’s Competition and Markets Authority (CMA).

Aurelius will pay £37.5 million for Footasylum, much less than the £90.1 million that JD Sports spent buying the firm in 2019.

“The sale has been agreed in accordance with the final undertakings issued by the Competition and Markets Authority (CMA) on 14 January 2022, following its decision to prohibit JD’s acquisition of Footasylum last year,” said JD Sports.

“JD has cooperated with the CMA throughout the divestment process, including ensuring that the purchaser was acceptable to the CMA and met certain key criteria set out within the final undertakings. The sale is anticipated to complete in the coming weeks with no conditionality.”

JD Sports interim CEO Kath Smith said: “I would like to sincerely thank the teams at Aurelius and Footasylum who worked collaboratively with the CMA to agree this transaction.

“We wish both parties every success for the future.”

Aurelius said in a statement: “In FY22A, the business (Footasylum) is expected to generate total revenues of more than EUR 340m (£287m) with an attractive EBITDA margin. Footasylum has been owned by JD Sports since 2019.

“The transaction will be completed by Aurelius’ mid-market co-investment structure comprising Aurelius European Opportunities IV Fund and Aurelius Equity Opportunities SE & Co. KGaA. The transaction is expected to be completed in August 2022.

“Footasylum is an omni-channel retailer of fashion streetwear and sportswear with 63 stores in the UK, with a ‘hyper-local’ approach – seeking to serve the local community.

“The company was founded in 2005 and is headquartered in Rochdale, UK.

“Footasylum comprises seven websites (group and own brand sites) and warehouse facilities. Today, the business sells a mix of footwear, apparel and accessories through stores, websites, and a wholesale channel. Well known key third party brands include Nike, adidas, TheNorthFace and NB.”

Dirk Markus, founding partner of Aurelius, said: “Footasylum has long been a staple of the UK high street and go-to shop for customers seeking high-end branded sportswear.

“As a standalone business, Footasylum has the potential to become an innovative retailer of sportswear and we are eager to unlock the company’s full potential.

“We believe that Aurelius is ideally placed to support Footasylum’s transformation, which will be backed by our extensive operational expertise within the retail, digital and wholesale channels.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.