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May 02, 09

Sports Direct waits on OFT decision over proposed JJB store sale

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The Office of Fair Trading is considering an offer by Sports Direct to sell stores in five local areas following its acquisition of 31 outlets from JJB Sports.

The Mike Ashley-owned retail chain purchased the stores from JJB in a series of separate transactions over a two-year period, but under merger legislation the OFT was able to review these acquisitions as one individual transaction. The OFT investigation found that the acquisitions raised competition concerns in five local areas where Sports Direct already had existing stores. As a result, Sports Direct has offered to divest outlets in these areas to buyers approved by the OFT.

Says Amelia Fletcher, OFT senior director of mergers: “The OFT used its discretion in this case to roll a number of separate acquisitions of JJB stores by Sports Direct over the last two years into a single investigation, given that the overall impact on consumers had the potential to be significant.

“Although our investigation indicated that the purchase of these stores had not reduced competition at a national level, we identified concerns in five local areas that needed to be addressed.”

If the divestments are not accepted, then a referral to the Competition Commission will be necessary.

 

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