36 Wednesday June 8 2022 | the times
Business
The competition watchdog said that JD Sports and Elite Sports colluded to fix thethey were in line for a reduction in the
fine. However, the regulator confirmed
its separate investigation into the price-
fixing of Leicester City football shirts,
involving JD Sports, was continuing,
meaning that the retailer could face
further fines.
When Peter Cowgill’s departure with
“immediate effect” two weeks earlier
was announced, sources told The Times
that price-fixing investigations and the
CMA’s recent £4.3 million fine over the
JD Sports executive chairman’s covertmeeting with Barry Bown, the Foot-
asylum boss, had played a part in the
board’s growing unease. No permanent
successor has been named.
An insider said the kit price-fixing
was “not the smoking gun”, but the
board had run out of patience. The
Rubin family, who own a 41.9 per cent
stake of JD Sports as well as having a
representative on the board, said last
month it was the “right time for the
business to fulfil its future ambitions
under a new governance structure”.1
Petrol and diesel reached £2 a
litre yesterday in parts of the
UK as the RAC declared a
“national fuel crisis”. The record
prices pave the way for the
average litre of fuel to hit £2
nationwide this summer. Page 152
Revellers at a London festival
were the first to try out a
cutting-edge haptic suit
designed to help wearers to
immerse themselves in the music.
The suits, which use 5G
technology from Vodafone, allow
users to feel sounds through multi-
sensory feedback and are
especially helpful for deaf people.
Page 193
The global economy is at risk
of falling into a 1970s-style
“stagflation” trap, the World
Bank warned as it slashed its
growth forecasts and raised the
alarm over growing sovereign debt
defaults. It said Russia’s invasion,
surging energy prices and a
slowdown in China would
“hammer” economic growth in the
years to come. Page 354
Biffa, Britain’s last big
independent binman, looks
set to fall to a £1.36 billion
takeover offer from an American
private equity firm. The company
said it had been speaking to
Energy Capital Partners for some
time about a takeover. Page 355
Cazoo is to cut 15 per cent of
its workforce and will reduce
its marketing spending to save
more than £200 million as it
becomes the latest casualty of the
economic slowdown. About 750
jobs will go from the online car
retailer’s 5,000 staff in Britain and
Europe. Page 356
JD Sports confessed to “cartel
activity” after an investigation
found it had fixed the price of
Rangers Football Club’s replica
kits at the expense of customers.
The FTSE 100 sportswear firm
said it anticipated a £2 million hit
from a fine and legal costs
associated with the case after
provisional findings by the
competition watchdog.7
Growth in the dominant
services sector has slowed to
its weakest pace in more than
a year as soaring inflation bites on
margins and a slowing economy
hits consumer demand. Page 388
The pace-setter in the race to
buy Ted Baker has pulled out
of the sale process, prompting
shares in the fashion brand to fall
by up to a fifth yesterday. Two
weeks ago Ted Baker said that it
had selected a “preferred counter-
party”, believed to be Authentic
Brands, an American group.
Page 409
The accountancy watchdog
has fined PwC a total of
£5 million for failings in its
audits of Kier and Galliford Try,
the listed construction companies.
Page 4110
Frustration with traffic led
Elon Musk to publish his
own plan for an
underground “hyperloop”
transportation system, the likes of
which the world had never seen,
which would ferry passengers
between leading Californian cities
in only 35 minutes for just $20.
Pages 42-43Need to know
JD Sports yesterday confessed to
“cartel activity” after an investigation
found that it had fixed the price of
Rangers Football Club’s replica kits at
the expense of fans.
The FTSE 100 sportswear company
said that it anticipated a £2 million hit
from a fine and legal costs associated
with the case after provisional findings
by the competition watchdog.
Shares in JD Sports closed 4¾p, or
3.9 per cent, down at 118½p last night,
valuing the business at just over £6 bil-
lion, having already tumbled by 44 per
cent in 2022.
The Competition and Markets
Authority said JD Sports and Elite
Sports, which manufactured Rangers
kit at the time, had agreed to fix the
price of the apparel. As a result of their
illegal agreement, the cost of a replica
strip increased by nearly by 10 per cent
from £55 to £60.
The arrangement was said to date
back to September 2018 until at least
July 2019. The CMA said Rangers had
become concerned when JD Sports
was selling the replica kit at a lower
price than Elite, the football club’s retail
partner, through its Gers Online web-
site. The regulator, which opened its
investigation in December 2020, found
that Elite and JD Sports had colluded to
align the level and timing of discount-
ing to “avoid competition between
them and protect their profit margins at
the expense of fans”.
Rangers’ move to Elite, which pro-
vided Hummel-branded equipment to
the club, came after the Glasgow clubhad ended a long-running and con-
troversial kit deal with Sports Direct.
Rangers has since moved on from
Hummel and Elite and is now supplied
by Castore, the fast-growing English
sports brand that also has kit deals with
Newcastle United and the England
cricket team and counts Sir Andy Mur-
ray and the Issa brothers as investors.
Michael Grenfell, executive director
of enforcement at the CMA, said: “We
are concerned that, in this case, Elite,
JD Sports and to some extent Rangers
may have colluded to keep prices high,
so that the two retailers could pocket
more money for themselves at the
expense of fans.”
The CMA has the power to fine com-
panies up to 10 per cent of their global
revenue if anti-competitive behaviour
is found, although insiders said this was
a worst-case scenario. JD Sports’
relatively paltry £2 million provision
reflects how small a part of business
Rangers’ replica kit is to the retailer.
Rangers said it was “committed to
operating its business in full compli-
ance with all laws, including competi-
tion law, and treats this matter very
seriously. As such, Rangers will review
in detail the CMA’s preliminary find-
ings and will be submitting its response
to the CMA in due course. Rangers
notes that it has co-operated with the
CMA since the investigation was initi-
ated.” It said that the findings were
“provisional” only and it did not mean
that “Rangers has broken the law and
that the CMA will issue a final decision
or impose a fine on Rangers”.
Elite was contacted for comment.
The CMA said Elite and JD Sports
had applied for leniency, which meantAshley Armstrong, Greig Cameron
Simon FreemanJD Sports ‘guilty’ of fixing
Starling boss threatens to sue former minister
The founder of Starling Bank described
a former anti-fraud minister as a
“public school-educated landed gentle-
man” who had “made a fortune from
offshore outsourcing” as she hinted at
legal action over what she called his
“wild accusations” about the bank’s
alleged failures to stop pandemic fraud.
In a letter to Lord Agnew of Oulton,
Anne Boden accused the former
minister of criticising the bank to
“exculpate yourself from the responsi-
bilities that you accepted when you
took the job as a minister”.
It marks a significant escalation of
the war of words between the chief
executive of the online bank and
Agnew, 61, who quit at the dispatch box
in January over what he claimed were
wholesale failures of oversight in the
government’s £47 billion bounce back
loan programme.
In May the former minister accusedStarling of having “acted against the
government and taxpayers’ interests”
as he alleged the bank was “one of the
worst” lenders for preventing fraud and
flagging suspicious activity in the state-
backed emergency lending scheme.
In the letter, seen by The Times,
Boden, 62, wrote: “Your statements are
defamatory and I must ask you to
withdraw them. You say that you have
no information to support your accusa-
tions, but you continue to repeat them
despite Starling making it clear that you
are wrong.”
She also raised Agnew’s links to
“lending businesses in the high-cost
credit space” and asked whether ven-
tures in which he had an interest had
used pandemic support schemes.
Agnew has said previously that he
would not be withdrawing his accusa-
tions until Starling provided evidence
that he should do so. He declined to
comment on Boden’s letter.
The former minister also hadclaimed that Starling had played down
the seriousness of directors exaggerat-
ing their turnover to get larger
state-backed loans. Starling denied this
and Boden wrote: “We have only met
once, on a video call during the
pandemic when I explained to you how
the scheme worked. I understand that
you did not like the fact that I
explained the scheme to
you. I am not sure whether
you were upset because
you didn’t understand the
scheme or because I had
the audacity to speak up.”
Boden repeated a call
for Agnew to withdraw
his remarks, threaten-
ing legal action if he
did not, saying: “Star-ling reserves all its rights in relation to
your defamatory statements.”
It was revealed this week that the
bank had pressured two all-party par-
liamentary groups that had hosted the
event at which Agnew made his
remarks not to publish the video of the
speech on their websites.
During the speech, Agnew claimed
Starling had used the scheme to “swell
its balance sheet by a factor of 50
times in barely less than a year, with
no risk to themselves and 100 per
cent risk to the taxpayer”.
Boden said she had been
“very open about Starling’s
participation in govern-
ment schemes”.
She told Agnew: “You as
a government minister
were there when the
[bounce back] scheme
was designed and had a
front row seat at its devel-
opment.”James Hurley, George GreenwoodAnne Boden rejects
criticism of Starling’s
use of the bounce
back loan scheme