There can’t be too many deals with such an outsized impact relative to their scale as JD Sports’ ill-fated acquisition of smaller rival Footasylum.
Not only was JD eventually forced to sell the business by the competition authorities, but revelations around the way the transaction took place were a key catalyst in the departure of its boss Peter Cowgill – a central figure in the sportswear chain’s rise.
Perhaps this was an evolution the company needed to go through anyway – it’s never a great look for the executive functions in a business to be combined. Following Cowgill’s departure JD is now moving to a more traditional structure with a separate chair and CEO – a long overdue move.
AJ Bell’s Russ Mould said: “However, the acrimonious nature of his exit means JD is having to take some extraordinary steps to ensure there’s no lasting damage from the affair.
“A total pay-off to Cowgill running into millions looks a heavy price for ensuring he doesn’t take his skills to any of JD’s rivals, or poach any of its key staff. As a coda Cowgill will also provide consultancy services to the business.
“JD will hope this draws a line under the whole episode and frees up management to tackle what could be a hugely challenging period for even the best retail names.
“The succession process at JD has certainly been more fractious than the one executed at Frasers Group, with Mike Ashley following his long-time rival Cowgill out of the door but willingly handing over the reins to his son-in-law Michael Murray.
“Incoming JD CEO Regis Schultz will now at least be spared the distraction of having a hugely influential predecessor at loggerheads with the business, but he will still face a hard act to follow in less than advantageous circumstances.
“One result of new leadership at both JD and Frasers may be smoother relations with regulators and the City.”
Leave a Comment