The ruling from the Competition and Markets Authority (CMA) now requires JD to sell the Footasylum business, even though the deal was completed last May.
JD had previously criticised the CMA for a failure to recognise that UK Sports retail was' a dynamic and rapidly evolving competitive landscape' and did not hide its frustration over what look likes a clear victory for rival Mike Ashley in its response today.
Ashley's Sports Direct group has been the most vocal critic of the deal citing JD’s tie-ups with big brands like Nike and Adidas that allow it to gain access to limited releases of trainers and other 'ath-leisure' garments from the sportswear giants.
Sports Direct has claimed the practice is an abuse of the market.
Peter Cowgill, Executive Chairman of JD, said: "When the CMA published its provisional findings in February, we said at the time that they demonstrated a complete misunderstanding of our market to an alarming extent.
"Today, and equally frustratingly, in the midst of a global pandemic and with the UK high street in a state of complete lockdown, the CMA's final decision is even more absurd.
He added the CMA had failed also to appreciate the “long lasting - and likely permanent - impact that COVID-19 has had on our industry, which may never return to its pre-merger state, to the particular detriment of smaller retailers like Footasylum”
“The clear evidence from China and other European markets is that, when current lockdown measures are lifted, it is virtually certain that footfall levels will not return to pre-crisis levels.
"This outcome would disproportionately impact smaller retailers like Footasylum, whose stores and shopping centre outlets rely so heavily on concentrated footfall and high trading densities."
JD Sports said it was carefully considering whether to make an application to the Competition Appeal Tribunal to review the decision.