JD Sports and Footasylum hit with £5m fine following covert car park rendezvous
A city watchdog has slapped sports retailers JD Sports and Footasylum with a nearly £5m fine after the firms’ bosses conducted covert meetings to discuss a blocked takeover, it has revealed.
The Competition and Markets Authority (CMA) has issued the fine after it said the two bosses shared commercially sensitive information in the meetings and failed to put proper safeguards in place to prevent rules breaches.
It comes after JD sports executive Chairman Peter Cowgill was caught on camera meeting his Footasylum opposite number, Barry Brown, in a car park in Bury in July last year, first reported in The Times.
The CMA said: “During two meetings, which took place on 5 July 2021 and 4 August 2021, Peter Cowgill, CEO of JD Sports, and Barry Bown, CEO of Footasylum, exchanged commercially sensitive information and then failed to alert or promptly alert the CMA.”
In the meeting, the CMA said the bosses discussed issues including Footasylum’s struggles with stock allocations from key brands, information on Footasylum’s financial performance and the planned closures of six Footasylum stores.
The CMA said that both bosses claimed they could not remember what was discussed in the meeting which showed that no proper safeguards had been put in place.
Kip Meek, Chair of the inquiry group investigating the merger, said: “There is a black hole when it comes to the meetings held between Footasylum and JD Sports.
“Both CEOs cannot recall crucial details about these meetings.
On top of this, neither CEO or JD Sports’ General Counsel can provide any documentation around the meetings – no notes, no agendas, no emails and poor phone records, some of which were deleted before they could be given to the CMA.”
Meek said the fine should act as a warning for the firms and pledged “serious consequences” if they break the rules.
JD hit back at the CMA’s ruling today, saying its conculsions are either “incorrect or have been presented in a misleading manner through the use of inflammatory language.”
The retailer said that the CMA is claiming for the first time that phone records have been deleted, which it “absolutely refutes”.
The meeting came as the two firms grappled with the regulator over JD’s £90m takeover of rival Footasylum in 2019.
The CMA eventually ordered JD to sell Footasylum in November after ruling that it could lead to a worse deal for shoppers.