Sports Direct owner Frasers Group has demanded the appointment of its founder Mike Ashley as chief executive of Boohoo as it warns over a mounting “crisis” at the struggling online fashion firm.

Frasers – which is Boohoo’s largest shareholder with a 27% stake – is calling 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”.

The firm said Mr Ashley could take on the role at Boohoo, replacing chief executive John Lyttle “without delay”, while it also wants restructuring expert Mike Lennon to join the board.

In an open letter to Boohoo’s board, Frasers cautioned over what it claimed was a “leadership crisis” at the retailer after Mr Lyttle announced he was stepping down last week.

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.

Boohoo also reported that revenues had dropped by 15% 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.”

Katie Cousins, equity analyst at Shore Capital, said Mr Ashley’s move to try and put himself at the helm was an “explosive development”.

She said while it was reassuring that Boohoo had recently secured financing, there were still underlying concerns over the business and its cash flow.

“In the cold light of day, we struggle to see past the increasing market pressures and limited expansion opportunities, but the potentially explosive development from Mike Ashley – proposing to be the new chief executive – adds a new dynamic,” she added.

Boohoo shares lifted 5% on Thursday morning.

It comes amid a busy week of corporate activity for Mr Ashley’s empire, after Frasers Group ditched plans for a £111 million bid for Mulberry on Wednesday following the rejection of its latest sweetened approach.

The group repeated calls for a seat on the luxury handbag maker’s board and urged Mulberry to provide a “credible” business plan swiftly.