Retailing rivals Sports Direct and JJB Sports were told late last night by the Office of Fair Trading (OFT) that an investigation into alleged illegal practices in the sports goods sector has been provisionally closed.
The two-year inquiry was sparked by JJB Sports informing the OFT regarding a “suspected agreement or concerted practice to dampen competition in the sports retail market” during June 2007 to March 2009.
In October 2010 the Serious Fraud Office ceased investigating the supposed cartel itself without bring any charges and now the Sport Direct has confirmed that the OFT will also drop the case.
Keith Hellawell, Chairman of Sports Direct, commented: “We welcome the announcement by the OFT. It is in line with Sports Direct’s long held views on the investigation. It is also consistent with previous decisions taken by other regulatory bodies.”
Current fortunes for the two retailers are in stark contrast, with JJB Sports only just staving off administration this spring whilst Sports Direct paid out a record staff bonus last month after a bumper year of trading.
Yesterday Sports Direct confirmed that it was to purchase 32 properties from it CEO and majority shareholder Mike Ashley in a deal worth £86.8 million.
Traditionally the retailer has preferred to lease the majority of its 394 store portfolio but it is claimed that the new properties, 29 of which are currently occupied by Sports Direct, are “a continuation of the group’s policy to pursue strategic acquisition opportunities of freehold interests in premises where appropriate and practicable”.
According to the Daily Telegraph, real estate firm CB Richard Ellis has recently calculated the vacant possession valuation of the properties in question to be 60 per cent lower than what Sports Direct has agreed to pay.