JD Sports has been ordered to sell Footasylum after serious concerns that competition would be reduced were found following an in-depth investigation.
The Competition and Markets Authority (CMA) said the Bury-headquartered giant is "by far and away" the closest alternative for shoppers at Footasylum and ordered the listed group to sell it.
The move follows a second investigation by the agency after JD Sports appealed against a previous ruling, saying investigators failed to take into account online sales through Nike and Adidas in the 海角视频.
READ MORE: Footasylum returns to the black after shift to online sales and Government pandemic support
But the CMA said it expects JD Sports' £90m takeover of Footasylum would continue reducing competition even after taking into account the growth in online shopping.
According to the watchdog, 50% of online shoppers surveyed said they would go to JD Sports if they were unable to shop at Footasylum for clothing.
A further 43% said they would the make the switch if they could no longer buy footwear from Footasylum.
The CMA said these figures were substantially higher than for any other retailer and that another survey of in-store shoppers showed similar results.
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Investigators added that they believed Footasylum would remain in robust health even if no longer owned by JD Sports, which bought the brand in April 2019, despite the pandemic and increased competition from other brands.
They pointed out that total revenues for last year were £232m with underlying pre-tax profits of £29.3m - up from £25.5m a year earlier.
The CMA added: "Requiring JD Sports to sell Footasylum is the only way to address its competition concerns and protect consumers.
"It will oversee the sale and approve the purchaser, in order to ensure that Footasylum will be run as a fully independent competitor."
Kip Meek, chair of the CMA inquiry group, said: "The 海角视频 boasts a thriving sports fashion market and today's decision reflects our commitment to keeping it that way.
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"We strongly believe shoppers could suffer if Footasylum stopped having to compete with JD Sports. It is likely they would pay more for less choice, worse service and lower quality.
"The pandemic may have altered the way we shop but innovative businesses, driven by healthy competition, will rise to the challenge and successfully cater to changing tastes and habits."
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Peter Cowgill, executive chairman of JD Sports, added: "The CMA rightly concludes that, following the acquisition of Footasylum, JD would have no incentive to raise prices or worsen its offer as its most important competitors are the DTC operations of the international brands themselves.
"However, the CMA has then somehow concluded that the competitive threat from DTC does not extend to Footasylum and that JD would have an incentive to worsen the offer in Footasylum to the detriment of both consumers and suppliers. We would suggest that the CMA is in a minority of one in reaching this conclusion.
"Overall, the CMA's decision today continues to be inexplicable to anyone who understands what difference the pandemic has made to 海角视频 retail and how competition and the supply chain in our markets actually work.
"It is deeply troubling at a time when the 海角视频 high street has been seriously damaged already and is vulnerable to further closures."