Frasers urges Boohoo to replace CEO with Mike Ashley

In an open letter to Boohoo's board, Frasers said it was requisitioning a general meeting of Boohoo to appoint Frasers boss Ashley as a director and remove current CEO John Lyttle "without delay".

Boohoo's shares jumped 3% to 28.3p in early deals on Thursday.

The letter follows requests by Frasers to nominate a board member "on a number of separate occasions", which it says Boohoo failed to meaningfully engage with.

Frasers' claims of "leadership crisis" at Boohoo, in which it owns a 27% stake, follow a sharp drop in revenues at the budget fashion retailer, with first-half gross profits expected to fall for the sixth straight reporting period when interim results are released next month.

Frasers labelled it an "abysmal trading performance" which has seen Boohoo's share price drop 29% so far this year and 17% over the past three months.

The letter comes just six days after Boohoo announced a "wholly unsatisfactory" £222m debt refinancing, which was agreed on unfavourable terms, Frasers said.

"The new £222 million facility is severely short dated, seemingly more expensive than the previous financing arrangement and almost unquestionably leaves the company in a position of needing to undertake drastic corporate actions (whether it be disposals, deeper operational cuts, closures etc.) in order to repay the term loan due in 10 months," Frasers said.

"Had Boohoo engaged constructively with Frasers on the refinancing, alternative solutions could have been fully explored which may have resulted in a more favourable outcome for all stakeholders."

Responding to the letter, Boohoo's board put out a statement saying it was reviewing the content and validity of the requisitions with its advisers. "A further announcement will be made in due course. In the meantime, shareholders are urged to take no action," the company said.