Sports Direct is planning to create the ‘Harrods of the North’ after snapping up Glasgow’s iconic Frasers building in a £95million deal.
The retail giant, which bought the House of Fraser chain out of administration earlier this year, said the deal will save 800 in-store jobs.
Sports Direct, owned by business tycoon Mike Ashley, has obtained the freehold from Glasgow City Council, ensuring the future of one of the House of Fraser flagship stores.
Northern powerhouse: Sports Direct is planning to create the ‘Harrods of Scotland’ after announcing it is to buy Glasgow’s iconic Frasers building in a £95m deal
The House of Fraser was founded in Glasgow in 1849 under the name of Arthur and Fraser, and it moved into the Frasers building in the 1950s.
Sports Direct said today it will continue to operate the 350,000-square foot site as Frasers and will invest in the property to ‘further elevate and enhance this iconic department store’.
It added that the deal, set to be completed in January 2020, demonstrated its ‘significant commitment to transforming the company’.
It comes as Ashley negotiates with landlords to keep House of Fraser stores open. He previously pledged to save 47 of its 51 sites.
Michael Murray, head of elevation at Sports Direct, said: ‘We are overwhelmed and proud to own such an iconic destination.
‘Acquiring the freehold enables us to elevate and invest in the store in order to partner with a broad range of luxury brands in future.’
House of Fraser said in a statement it was ‘great news’ for the House of Fraser workforce, including the 800 in-store jobs that it says have now been saved because of the deal.
Commenting on the deal, retail analyst Nick Bubb said: ‘Time will tell if that is money well spent, but this is one of the flagship House of Fraser stores and the promise is that Sports Direct “will invest in the property to further elevate and enhance this iconic department store”, although no figures are mentioned and completion of the deal will not take place until Jan 2020, oddly enough.’
Kevin Sims of CBRE, who represented House of Fraser during the acquisition, said: ‘This is a fantastic deal for Glasgow and Scotland.
‘It is an iconic store and much of the success of Buchanan Street over the last 20 years has been built around having Frasers as an important anchor tenant for the street.
Big deal: Sports Direct, owned by tycoon Mike Ashley, has obtained the freehold from the House of Fraser brand, which was bought by Sports Direct after going into administration
‘This fully cements House of Fraser’s intent to create a luxury department store business.’
Susan Aitken, leader of Glasgow City Council, added: ‘Glasgow is the country’s number one retail centre after London – and the House of Fraser store on Buchanan Street is a city institution, much loved by generations of Glaswegians. A major investment on this kind of scale is a clear vote of confidence in Glasgow.’
Sports Direct bought House of Fraser for £90million in August, including the 59 stores, the brand and all of the stock.
Last month Ashley, who already owned an 11 per cent stake in the company, pledged to save around 47 of the stores, agreeing deals with landlords to rescue 20, including its flagship Oxford Street store, safeguarding around 3,500 jobs.
Rescue package: Last month Mike Ashley pledged to save around 47 of the stores, agreeing deals with landlords to rescue 20, including its flagship Oxford Street store
However, he also announced the closure of three stores and plans to shut a fourth, after failing to agree terms.
This month Sports Direct sacked all of the House of Fraser’s top directors and management, with chief executive Alex Williamson understood to be among those departures.
The Frasers store in Glasgow stocks brands including Hermes, Christian Louboutin, Prada and Gucci.
The House of Fraser rescue followed a series of high street collapses including retailers Toys R Us and Maplin.
Yesterday struggling fashion retailer Coast called in the administrators and Patisserie Valerie also warned that it could fold without a significant cash injection.