JD Sports plunges after executive chairman steps down

JD SPORTS FASHION fell as much as 12 per cent in early London trading after announcing executive chairman Peter Cowgill is stepping down with immediate effect.

The move comes just a few months after the British retailer was fined nearly £5 million (S$8.6 million) by the country’s antitrust regulator. JD Sports said Helen Ashton, chair of the audit and risk committee, will become interim non-executive chair. Kath Smith, senior independent director, will become interim chief executive officer, according to a statement Wednesday (May 25). Searches for a permanent chair and CEO are underway.

The move comes about 3 months after JD Sports was fined by the Competition and Markets Authority (CMA) for sharing commercially sensitive information and breaching an order relating to its proposed merger with smaller rival Footasylum. 

JD Sports agreed to buy Footasylum in 2019 for £86 million but the deal was blocked by the CMA over competition concerns. The 2 companies were ordered not to exchange sensitive information without prior consent. 

The regulator said 2 meetings that Cowgill held with Barry Bown, his counterpart at Footaslyum, including 1 in a parking lot, breached the ruling that barred the 2 merged companies from integrating further, pending the outcome of the competition investigation.

JD Sports said after the fine that it “acted honestly and in good faith” in its efforts to comply with the CMA order.

Cowgill has been instrumental in the rise of JD Sports and developed it into the leading sportswear and sneaker chain in Britain.

The retailer said it had decided to accelerate the separation of the roles of chair and CEO as a result of an ongoing review of its internal governance and controls.

“As our business has become bigger and more complex, what is clear is that our internal infrastructure, governance and controls have not developed at the same pace,” said Ashton. 

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Pentland Group, the largest shareholder in JD Sports, said Cowgill delivered “unprecedented success and growth”.

“With such growth comes a responsibility to ensure the business continues to evolve its internal organisation,” Pentland said in a statement, adding it is the right time for the company to have a new governance structure and new leadership. BLOOMBERG