Penescu brothers, from the battle with Carrefour to insolvency

A business started with 3 people and a juice stand in Pitesti in 1991, which in 2007 valued its assets at 70-80m euros, is now struggling to sort out its problems after having been abandoned by banks and most suppliers.
Cornel and Ilie Penescu's biggest bet, Pic hypermarket network, also proved to be the riskiest. "It's more difficult to sell than produce, because to sell you must first convince," said Liviu Facaleata, general manager of Pic Group and one of the 3 people with whom Penescu brothers created their first business in 1991, back in 2006.
After filing for insolvency and closing three hypermarkets, Pic owners must now persuade suppliers to resume deliveries to the two hypermarkets left in the network.
How has Penescu brothers' business turned from the most ambitious Romanian food retailer into the most resounding insolvency case in retail, in the wake of which more than 1,500-2,000 employees were made redundant?
Suppliers say falling consumption and the very risky bet on expansion could put the biggest Romanian retailer out of business.
Partner banks and around 400 suppliers have almost 60m euros to recover from Pic, according to the data provided by Ilie Penescu. Last year, Pic SA company posted 154m-euro turnover and total debts of 90m euros, according to Finance Ministry data.
"I believe the problem was the investment in the store of Calarasi, as the city lacks potential because of the very low living standards. They also made a mistake in expanding with money from suppliers," a distributor states.
"I am sure Pic's insolvency is rather related to the management of the business, than to the current market context," says Adrian Manolache, general secretary of the Association of Large Retail Networks in Romania.
Cornel Penescu's arrest was also a heavy blow to Pic's retail business. Most suppliers halted deliveries to Pic before the network filed for insolvency.
Ilie Penescu in July announced he hired several consultants to find investors that should buy Pic hypermarkets' spaces in a sale and lease back system, which would have allowed the network to continue its operations. No buyers were found, though, but a financial restructuring process was started with the aid of consultants.
Battling with very strong international players, all the three Romanian operators that have bet on the "star" retail segment in the past five years are now insolvent.