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Mike Ashley's woes piled up today as the sportswear chain billionaire was told he is under investigation by the Competition Commission.
The Sports Direct boss is already under pressure from the High Street recession, the likely losses he is to make from the sale of Newcastle United, the football club he controversially bought with the proceeds of the flotation of Sports Direct, and a high-profile slanging match with arch-rival JJB.
Today the Office of Fair Trading referred Sports Direct to the Competition Commission because it has given up hope of Ashley fulfilling its demand that it sell five of 31 JJB outlets bought over a two-year period.
Sports Direct acquired the stores when JJB was being run by Ashley's close associate Chris Ronnie. He has since been ditched by JJB's new boss Sir David Jones with whom Ashley has fallen out badly. After the OFT looked at the piecemeal acquisition of the stores, it concluded in May there were “competition concerns” in five towns where Sports Direct has a local monopoly.
It instructed Sports Direct to divest the outlets within three months. Sports Direct has not and OFT director Amelia Fletcher said: “We have rejected Sports Direct's request for additional time to try to achieve a sale. We are not persuaded that an extension would make a difference in this case, and in these circumstances the proper course is for the OFT to refer the matter to the Competition Commission.”
