Fopp, the Glasgow-based music and entertainment retailer which started from a market stall, yesterday became Britain's biggest independent chain of its kind after buying 67 stores formerly owned by Music Zone.

The company, which celebrated its 25th birthday last year, trebled the number of shops it owns in Britain with the multi-million pound buy-out of most of its rival's stores.

The deal, which has saved 775 jobs, includes the acquisition of Music Zone's head office and warehouse in Stockport and a warehouse in Norfolk.

Formed by 49-year-old entrepreneur Gordon Montgomery in the west end of Glasgow, the buy-out takes Fopp from 35 stores to more than 100, giving it a stronger hold across Britain. But 31 other Music Zone stores, which shut in January, will remain closed, with the loss of 325 jobs.

That includes nearly all the Scottish shops: in Inverness, Glenrothes, Dunfermline, Dumfries, at Glasgow Forge, and its Scottish megastore in Argyle Street, Glasgow, which was opened just over a month ago. It is understood that only one of Music Zone's seven Scottish stores will stay open - the shop in Sauchiehall Street, Glasgow.

Deloitte, the administrator of Music Zone, said the deal had come too late to save the stores which closed on January 25.

Bill Dawson, a partner at Deloitte, said: "We are pleased with the disposal to Fopp, and wish them every success in the future. This represents a much better outcome for creditors and other stakeholders than a piecemeal disposal."

The success of Fopp comes at a time when Scottish music artists are asserting themselves in the homes and playlists of the British public.

Last week four of the top 10 selling albums were by Scottish-based artists. They include chart toppers The View's Hats Off To The Buskers, The Fratellis' Costello Music, Snow Patrol's Eyes Open, and Paolo Nutini's These Streets.

Barclay Price, director of Arts and Business Scotland, said Fopp's growth would be good for the economy and hoped it might lead to further support for popular culture in Scotland.

"Fopp has created a brand that reflects the culture of Scotland in an idiosyncratic way and that perhaps has given it the edge over other more tired brands," he said. Coventry-born Mr Montgomery, the seventh of eight children, with eight O-levels to his name, started the business with just £2000 of savings and a vision of selling discounted music through what was then A1 Records from De Courcey's Arcade off Byres Road.

Two years ago, Fopp had generated £48m in sales from just 17 stores. Renowned for its cut-price CDs and DVDs, it declared a pre-tax loss of £329,000.

It is thought the figures were skewed as the company had to pay out £247,000 as "compensation for loss of directorship" linked to a boardroom exodus.