Footasylum shares up 89% after JD Sports takes stake
JD Sports Fashion says it has acquired 8.3% stake, and could buy nearly 30% of its smaller rival
Footasylum was forced to cut prices at its 60 stores after a disappointing run up to Christmas
Shares in Footasylum soared on Monday after British retailer JD Sports Fashion said it had acquired an 8.3 per cent stake and could buy nearly 30 per cent of its smaller rival.
JD, which has used a number of corporate acquisitions to assemble its network of more than 2,400 stores over the past two decades, said it “confirms it is not intending to make an offer for Footasylum” under merger regulations.
However, investors drove shares in the company, which is listed on the secondary market of the London Stock Exchange, up 89.6 per cent to 55 pence in trading Monday.
Footasylum, started by JD Sports co-founder David Makin in 2005, was forced to cut prices at its 60 stores after a disappointing run up to Christmas which saw British consumers rein in spending.
It now competes with JD Sports, Sports Direct and Asos among others. All are feeling the impact of sluggish British consumer spending amid squeezed household incomes and uncertainty ahead of Britain’s impending exit from the EU. – Reuters