The executive chairman of luxury fashion house Paul Smith, Ewan Venters, has described the terms of Frasers Group’s takeover of Harvey Nichols as “ethically dubious” on a BBC podcast.

Speaking on the Big Boss interview podcast, Venters questioned the morality of the pre-pack takeover which left suppliers facing large write-downs on money owed to them.

Mike Ashley’s Frasers Group acquired the luxury department store chain for £43.3 million last month after it collapsed into administration while owing creditors £270.5 million.

Early estimates from administrators suggest that unsecured creditors could recoup less than 15 per cent of what they are owed. Paul Smith is one such creditor, owed nearly £97,000. Other creditors include major apparel brands Jimmy Choo, Canada Goose and Victoria Beckham.

Referring to the debts, Venters said: “I find it all a bit odd and I don’t think that’s a kind way of doing business.”

He did, however, acknowledge that Frasers Group may have played a key role in maintaining the Harvey Nichols brand.

“On the other hand, maybe Harvey Nichols was about to go to the wall and maybe Mike and his team will hold that brand and keep it going. But let’s see,” he added.

Frasers Group’s takeover is likely to lead to major changes at Harvey Nichols. Ashley, owner of Frasers Group, previously described the company as being in a “death spiral”, while the conglomerate has said that it will require “significant restructuring” to restore it to profitability.

The acquisition was the latest in a series of moves aimed at increasing Frasers Group’s presence in the luxury retail space. It is currently in the process of taking over Hugo Boss, having ousted its chairman earlier this week, and has recently increased its stake in British luxury brand Burberry.

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