Former Tesco chief executive Sir Terry Leahy could become chairman of online retail group The Hut.

It is understood that Leahy, who left Tesco in March 2011, is on the shortlist of candidates to replace former Matalan box Angus Monro at the pureplay business, The Daily Mail reported.

Monro, who will remain as a director, is understood to be keen to add smaller rapidly growing firms to his portfolio of interests. A decision on The Hut’s chairmanship is expect in the autumn.

Leahy is already a shareholder in The Hut, alongside former Marks & Spencer executive chairman Sir Stuart Rose, and has also been involved since leaving Tesco in starting a chain of shopping malls in China and producing his book, Management in 10 Words.

Sales at The Hut are understood to have risen by a third so far this year and turnover is expect to surpass £180m by the end of 2012.

The retailer, which owns sites including entertainment specialist, refinanced after scrapping plans for a flotation last year. The likely appointment of Leahy as chairman is likely to fuel speculation the etailer will float on the London Stock Exchange next year.