Sports Direct creating new upmarket fashion division
Sir Tom Hunter has sold 80 per cent of his stake in fashion retailers USC and Cruise.
Sports Direct, founded by Newcastle United owner Mike Ashley, has invested in the businesses as part of a £7 million deal.
Hunter has been involved in USC since 2004 and bought Cruise in December last year.
He is retaining a 20 per cent stake in both companies and will remain as chairman while also providing advice to the newly formed premium and luxury lifestyle division of Sports Direct.
Both USC, which has 38 stores and a turnover of £70 million, and Cruise, which trades from 10 locations on a £20 million turnover, will continue to have their headquarters in Scotland.
Sports Direct is providing up to £20 million to allow the existing management teams at USC and Cruise to draw up expansion plans.
Sources close to the deal suggested both sides saw it as a "huge opportunity" to take advantage of the distressed state of high street retailing.
Sir Tom Hunter said: "This deal will transform the prospects for both USC and Cruise and our employees at a time of extraordinary turbulence in the high street.
"I've known the Sports Direct team for many years and have huge respect for their talent and look forward to co-investing with them."
Dave Forsey, chief executive of Sports Direct, said: "We are pleased to be taking this opportunity to work with Tom and his teams in the premium and luxury sector of the market.
"While USC and Cruise will remain independent of Sports Direct, we will support the businesses with our operational expertise."