JD Sports agrees to buy Footasylum for £ 90 million

 

JD Sports is putting its smaller, struggling rival out of its misery. JD Sports Fashion has agreed to buy Footasylum for £ 90 million (US $ 119.6 million).

The takeover bid comes as no major surprise, since JD Sports acquired an 18.7 per cent strategic stake in February and there is history between the two companies. However on the same day the stake was revealed, JD Sports did specifically state it was ‘not intending to make an offer’ for its embattled high street competitor.

Footasylum was founded in 2005 by David Makin, who had earlier been one of the co-founders of JD Sports. Makin was joined by his JD Sports co-founder John Wardle, who was the chief executive of Footasylum from 2008 to 2015 and later became its executive chairman. Makin and Wardle had been bought out by JD’s current majority owner Pentland Group in 2005 and they later resigned as directors of JD Sports. Footasylum sells footwear and apparel primarily to 16- to 24-year-olds and competes with Mike Ashley’s Sports Direct and ASOS among others.

“Footasylum is a well-established business with a strong reputation for lifestyle fashion,” JD Sports said in a statement, adding that the two retail brands were complementary.

Like other retailers, however, it is feeling the impact of sluggish British consumer spending, squeezed household incomes and uncertainty ahead of Brexit. Its sales during Christmas were dismal, and also forced the company, which sells sportswear made by companies such as Nike and Adidas across the UK, to cut prices and lower its profit expectations for the full year.

JD Sports said that shareholders representing about 63 per cent of Footasylum’s shares have agreed to the deal.

 

 

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