Sports Direct plans to buy the House of Fraser building in Glasgow in a £95m deal.
The firm has promised to turn the luxury department store into the “Harrods of the North”, safeguarding 800 jobs.
The store, which is owned by a pension fund administered by Glasgow City Council, will continue to trade as Frasers.
Sports Direct hope to complete the full deal by 2020.
Glasgow City Council leader Susan Aitken described it as a “vote of confidence” in the city.
Sports Direct bought Frasers out of administration in August, acquiring 59 stores throughout the UK.
The billionaire founder of the company, Mike Ashley, later paid a surprise visit to the store on Glasgow’s Buchanan Street.
Analysis by BBC Scotland business editor Douglas Fraser
The claim that Sports Direct has “secured 800 jobs” at Frasers in Glasgow carries the implicit message that they were threatened. This was an anchor store where the House of Fraser story began, and the previous management (all sacked last week) said the Glasgow outlet was the most profitable in the group.
So was it at risk? What this deal seems to reflect is the process Mike Ashley has under way, of muscling his way through the list of commercial landlords, demanding better lease terms. Or else…? Without House of Fraser, many of them would struggle to find a better use.
As a warning to other commercial property and pension fund landlords, Sports Direct announced last month it has failed to reach a deal on stores in Hull, Swindon and Edinburgh .
The Princes Street ‘Frasers’ store in the Scottish capital is soon to close, and is well placed to become another city centre hotel, while Jenners – also a House of Fraser store and also on Princes Street – remains open.
As Sports Direct announced the purchase of the Glasgow building, it was revealing that a tenancy deal has been done to retain the Birmingham department store. The flagship on London ’s Oxford Street was first to get to a deal, in August, and others have been green-lighted more recently.
So does the Glasgow store become the ‘Harrods of the North’, with luxury brands like the world-famous London department store? Well, first, improvements will require new investment in a sometimes shoddy building, and there’s no promise of that, yet.
Second, some might say it has long been at least as attractive an emporium of high-end goods as Harrods. Others might point out that Harrods is notable for its high prices, aimed at high-spending tourists and Kensington’s tasteless super-rich – so is it the kind of retail role model that Scottish shoppers would want?
Michael Murray, head of elevation for the new owners, said: “We are overwhelmed and proud to own such an iconic destination.”
He added that acquiring the building “enables us to elevate and invest in the store in order to partner with a broad range of luxury brands in future. This is fantastic news for all parties.”
The building is owned by the Strathclyde Pension Fund, which is administered by Glasgow City Council.
It is listed and extends to about 350,000 sq ft arranged over multiple floors.
Susan Aitken, leader of Glasgow City Council, said: “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; and credit must also go to hundreds of Fraser’s staff, who are absolutely integral to the business’ success and its enduring popularity with city shoppers.”