Boohoo told to appoint Mike Ashley as chief executive as 'it is in its best interests'

Frasers Group has demanded the appointment of Mike Ashley as chief executive of Boohoo as it warned over a mounting 'crisis' at the online fashion firm.

Sports Direct owner Frasers - which is Boohoo’s largest shareholder with a 27 per cent stake - has called for a meeting of Boohoo investors to back its plans to appoint Mr Ashley, claiming it is 'in the best interests of Boohoo, its shareholders and its stakeholders'. This comes after John Lyttle stepped down as chief executive of the fashion brand last week.

In an open letter to Boohoo’s board, Frasers cautioned over what it claimed was a 'leadership crisis' at the retailer - which has its HQ based on Dale Street in Manchester. The firm also wants restructuring expert Mike Lennon to join the board.

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Frasers said: "The board appointments proposed by Frasers are now the only way to set a new course for Boohoo’s future." Boohoo said it was reviewing the request and would make an announcement in due course, but urged shareholders to take no action.

In its letter to Boohoo, Frasers claimed the firm had failed to engage with it and had not responded to a request made privately to install Mr Ashley as chief executive. It follows Mr Lyttle’s announcement last Friday that he would step down after five years as chief executive, but continue to work with the leadership team to ensure a smooth transition.

At the same time, Boohoo revealed plans for a strategic review, sparking speculation regarding a potential break-up of the business. This came as Boohoo also reported that revenues had dropped by 15 per cent to £620 million for the six months to August 31.

Frasers said: "In the face of persistent failure by the board to meaningfully engage on this subject, and in light of the other above-mentioned major concerns, Frasers has been left with no option but to take action itself in order to provide a solution to Boohoo’s leadership crisis.

"Frasers believes the time has now come for Frasers’ proposal to be made public and for a broader discussion regarding boohoo’s potential and how best to fulfil it. Therefore, Frasers is requisitioning a general meeting of the company.

"It is critical for Boohoo’s future success that shareholders urgently be given the opportunity to appoint to the board experienced individuals capable of delivering the necessary changes to deliver long-term value for all shareholders."

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