PESTLE in Action | Competition Regulators Force JD Sports to Sell Footasylum at a Loss

A topical example here of how regulation is forcing a business to reverse an attempt at external growth.

As the BBC reports here, JD Sports is selling Footasylum, but at a significant loss compared with what it originally paid.

In 2019 JD Sports completed the takeover of competitor retailer Footasylum for £90million.

Three years later it is selling the business for £37million.

Why the forced, quick sale at what appears to be a discount price?

Because the Competition and Markets Authority (CMA) - the organisation that regulates competition in the UK - decided that the takeover of Footasylum could lead to less choice and a "worse deal" for customers.

So JD Sports has been forced to sell the business.

The buyer, a venture capital fund with other retail investments, looks like it may have bought Footasylum at a bargain price.