Mike Ashley’s has pledged to turn the ailing House of Fraser into the “Harrods of the High Street” after Sports Direct stepped in with a £90m rescue package.

The billionaire Sports Direc boss pledged to keep as many House of Fraser stores open as possible after he struck a deal to buy the firm out of administration yesterday, raising the hopes of thousands of staff. However many will still have an anxious wait to find out their fate.In a stock market announcement, Sports Direct said it had acquired all 59 House of Fraser stores, the brand and all of the retailer’s stock. A previous restructuring plan had slated 31 stores for closure.

Some 17,000 staff have been informed that they will be transferred over from House of Fraser to Sports Direct. However, doubt remains over the long-term future of jobs and it seems likely some underperforming stores will still close as part of a rescue programme.

Mr Ashley, who also owns Newcastle United, said only that Sports Direct will “do our best to keep as many stores open as possible” but added: “My ambition is to transform House of Fraser into the Harrods of the high street.”

The deal was struck through a “pre-pack” administration process, where a company is put into administration before a new buyer cherry-picks the best assets.

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The Sports Direct deal was chosen despite competition from retail rival Philip Day, the billionaire owner of Edinburgh Woollen Mill. It is understood that Mr Day’s proposal was in excess of £100 million, would have avoided an administration and included House of Fraser’s pension scheme. However, accountancy giant EY, which was overseeing the process, opted for Mr Ashley’s offer.

The Sports Direct chief described the deal as a massive step forward and part of his “strategy of elevation” across a group which includes he luxury fashion chain Flannels.

According to industry sources, Mr Ashley now intends to turn some House of Fraser stores into Sports Direct outlets and rebrand others under the Flannels brand.

Prior to its collapse, Mr Ashley had held an 11% stake in the department store chain. He has also built up stakes in rival firms to those already in his portfolio, such as Debenhams, Goals Soccer Centres and French Connection.

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House of Fraser was plunged into crisis last week after C.banner, the Chinese owner of Hamleys, pulled its investment in the troubled retail chain. C.banner had been planning to buy a 51% stake in House of Fraser and plough £70 million into the ailing retailer.

The new deal appears to mean the scrapping of the previous restructuring plans and a Company Voluntary Arrangement (CVA) under which House of Fraser had agreed with landlords to close half of stores, with 6,000 jobs under threat.

Richard Lim, of Retail Economics, said: “This is a hugely ambitious move for Sports Direct. The combination of both businesses will yield some vital cost-saving synergies while it’s likely that some of the struggling House of Fraser sites will be rebranded to Sports Direct. Nevertheless, this is a part of the industry that is under a huge amount of pressure. The stores are failing to attract sustainable levels of footfall while battling against rising operating costs and shifts in shopper behaviour.”

Adam French, Which? Consumer Rights expert, called on the company to honour existing obligations to customers. “That means accepting gift vouchers, fulfilling online shopping orders and processing returns and refunds as if nothing has changed,” he said.

However unions and politicians expressed concern about what the Sports Direct deal might mean for workers.

Unite said poor pay and working practices at Sports Direct should not be transferred into the department store chain.

Unite regional officer with responsibility for Sports Direct Scott Lennon said: “Sports Direct is a leopard that has not changed its spots and we hope that its poor record on pay and employment practices are not transferred to the House of Fraser.

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“ We fear for jobs and employment conditions at the House of Fraser going forward. The staff are entering a period of great uncertainty and worry. Ministers need to wake up to what is happening to hard working employees who have minimal employment protections in 2018 Britain.”

Dave Gill – National Officer for shopworkers’ union Usdaw said: “House of Fraser staff have been largely frozen out of the discussions and they were horrified to see the company fall into administration this morning. So we welcome a buyer for the whole business being found so quickly, which offers the best opportunity to save jobs. It is crucial that staff are treated with dignity and fairness through the transfer process.”

Scottish Labour’s Shadow Cabinet secretary for the economy, Jackie Baillie, said: “This has been a deeply worrying and stressful time for thousands of House of Fraser workers across the country.

“The news that a deal has been struck to save the company is welcome, but Mike Ashley must now provide these workers with clarity.”