JD Sports Fashion PLC (LON:JD.) and its largest shareholder Pentland have been slapped with a record £300,000 fine by the UK’s competition regulator for breaching obligations relating to a probe over the 'athleisure' wear chain's takeover of Footasylum last year.
The Competition and Markets Authority (CMA) said on Wednesday that it had imposed the penalty because JD and Pentland had “without reasonable excuse, failed to comply in certain respects with the requirements imposed on them” by an enforcement order issued last May.
More specifically, the fine related to a requirement to not sell any Footasylum assets without approval, however, the CMA said the company had exited a store in Wolverhampton last October through the enforcement of a break clause.
JD, however, said it will appeal the decision to impose the fine, saying the decision to exit the Wolverhampton store was made independently by Footasylum’s management.
Regulators initially opened an investigation into the purchase shortly after it was completed last year, ordering that Footasylum and JD be run as separate companies in the interim period, however, earlier this year the CMA blocked the merger outright and order JD to sell off the footwear chain citing concerns over a lack of discounts for shoppers and lower quality customer service.
Shares in JD were 3.2% higher at 635.8p in mid-afternoon trading on Wednesday.