'A costly mistake': JD Sports sells Footasylum to German private equity firm Aurelius for £37.5m - having paid £86m for it in 2019
- The sports retailer bought the streetwear brand for £86m in 2019
- But CMA forced to sell it after ruling it would lead to a 'worse deal' for customers
- Aurelius Group is the owner of the parent group of Lloyds Pharmacy
JD Sports has agreed to sell its Footasylum chain to Aurelius Group, a German private equity firm, for £37.5million.
The sports retailer bought the streetwear brand for £86million in 2019 but has been forced to dispose of it after the competition watchdog ruled that the takeover could lead to a 'worse deal' for consumers.
The group successfully appealed the initial decision to block the takeover but the Competition and Markets Authority issued a final notice to sell last November.
The competition watchdog issued a final notice to JD Sports to sell Footasylum last November
JD Sports chief executive, 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.'
JD Sports shares were up 0.7 per cent to 130.45p in morning trade on Monday.
The sale to Aurelius, which owns the parent group of Lloyds Pharmacy, puts an end to some turbulent months for the retailer.
The long-term boss of JD Sports, Peter Cowgill, resigned from the company in May after a series of missteps.
JD Sports and Footasylum were fined £4.7million by the CMA after Cowgill and his opposite number Barry Brown held a secret car-park meeting amid the takeover and were found to have discussed commercially sensitive information.
In 2021 Cowgill, who spent 18 years as the retailer's executive chairman, also faced a shareholder rebellion over his pay package, with some 51 per cent of independent investors voting against a £4.3million bonus paid in the middle of the pandemic.
Retail veteran Andrew Higginson replaced Cowgill as chairman last month, while board member Kath Smith took over as interim chief executive.
JD Sports, which owns Tessuti and Go Outdoors, said the sale should complete in the coming weeks.
Russ Mould, investment director at AJ Bell, said JD Sports' acquisition of Footasylum had been a 'costly mistake'.
'Forced to sell by the competition regulator, it has made a pretty staggering loss of nearly 60 per cent on an investment made just three years ago,' he said.
'However, the real costs run greater than just the financial.
'Events surrounding the doomed transaction contributed to the departure of its executive chairman Peter Cowgill, after a highly successful tenure, and damaged the company's reputation for good governance.'
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