It follows years of clashes between Mr Ashley and his Danish rival. In late 2020, when Scotland’s oldest department store Jenners collapsed, both blamed each other for its demise.
The pair butted heads again last year at Asos when Frasers offered to make a further investment when the online fashion firm was struggling with a cash crunch. Asos instead opted for a share placing underwritten by Mr Povlsen’s company and fellow shareholder Camelot.
City sources suggested Asos had kicked off the latest process to find a buyer for Topshop amid pressure to free up cash, attracting interest from the likes of Chinese fast fashion firm Shein and Forever 21 owner Authentic Brands Group.
Asos has been struggling with sliding sales, including at Topshop where there has been a decline of around 15pc.
Asos kicked off a turnaround drive last year, saying nothing was off the table in the battle to revive the business. In November, it mothballed a £90m warehouse that it had opened just two years earlier.
Dave Murray, the chief financial officer of Asos, said there had been a number of offers for Topshop and it had openly consulted with shareholders.
He said work had been under way to make sure the deal was “fair to all shareholders involved”, in an attempt to ward off concerns over a potential conflict of interest in selling the brand to a business controlled by its largest shareholder.
Asos does not need to go to shareholders for approval over the deal, although it is subject to antitrust approvals.
Mr Povlsen’s offer is understood to have been particularly attractive as it allows Asos to continue selling the Topshop brand online, drawing customers who only visit its website for pieces from the brand.
Speaking on Thursday, Mr Ramos Calamonte said the new joint venture would be focused on making Topshop “more accessible” to shoppers, adding that new stores could be on the horizon.
He said: “There’s no question that Topshop and Topman both have a big heritage of being present on the high street, so we will see.”
Over the past few months, there has been speculation that Asos is starting to scope out potential sites to relaunch Topshop into stores, with Carnaby Street pointed to as a possible location. Bosses sought to dampen rumours on Thursday, saying it was not looking at particular sites.
Topshop closed its stores in late September 2020, including its flagship Oxford Street shop. The location, which is being taken over by Ikea, has yet to reopen following construction work that discovered leaky basements. Ikea has pushed back the opening twice. It is now expecting to launch the store in spring next year.