Frasers Group PLC (LSE:FRAS)’s Sports Direct arm has lost an appeal over rival JD Sports Fashion PLC (LSE:JD.)’s exclusive supply agreement for Newcastle United football kits.
Sports Direct, a subsidiary of former Newcastle owner Mike Ashley’s Frasers, will not be able to sell the club’s strips over the upcoming season as a result.
The company had requested an order in the Court of Appeal forcing the club to supply it with kits after being denied by the Competition Appeal Tribunal last month.
According to the tribunal, Sports Direct had “no reasonable or legitimate expectation” of continued supply as Newcastle changed its kit supplier from Castore to Adidas.
Lawyers on behalf of Sports Direct then argued the deal was “an unlawful anti-competitive agreement” as a bid for an interim injunction was submitted to the Court of Appeal.
This was rejected on Friday though, with Sports Direct also planning a full trial of the legal claim.
“The trial will no doubt be hard-fought,” the judge, Geoffrey Vos, said as the bid was thrown out.
“But the damage to Newcastle United will be far more fundamental if the injunction is wrongly granted than the damage that will be done to Sports Direct if it misses one, or even two, seasons' supply.”