The rescue deal includes all of the department store chain’s outlets.
In a statement to the stock exchange, Sports Direct confirmed it had bought the retailer for £90m in cash, shortly after it fell into administration this morning.
“The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business,” it said.
More details of what this means for the group’s 17,000 staff are expected to follow.
Mike Ashley has long wanted to take control of House of Fraser. He bought an 11% stake in 2014, when 89% of the business was sold to the Chinese conglomerate Sanpower in a deal worth £480m.
The Sports Direct founder has considered buying a department store chain for several years. He also has a 29.7% stake in House of Fraser’s rival Debenhams.
House of Fraser appointed accountancy firm EY as administrators on Friday after last-ditch overnight talks with investors and creditors had “not concluded in a solvent solution”.
Events have moved quickly since the retailer told investors on Thursday it needed to raise new funds by 20th August.
The group needed about £50m after C.banner, the Hong Kong-listed owner of Hamleys, pulled out of plans to raise £70m to invest in House of Fraser. The investment was part of a restructuring plan.
Ashley and other potential bidders, including Philip Day, the owner of Edinburgh Woollen Mill, and the restructuring specialist Alteri were asked for their best offers this week as the group’s lenders considered their options.