A business started with 3 people and a juice stand in Pitesti in1991, which in 2007 valued its assets at 70-80m euros, is nowstruggling to sort out its problems after having been abandoned bybanks 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 thanproduce, because to sell you must first convince," said LiviuFacaleata, general manager of Pic Group and one of the 3 peoplewith whom Penescu brothers created their first business in 1991,back in 2006.
After filing for insolvency and closing three hypermarkets, Picowners must now persuade suppliers to resume deliveries to the twohypermarkets left in the network.
How has Penescu brothers' business turned from the most ambitiousRomanian food retailer into the most resounding insolvency case inretail, in the wake of which more than 1,500-2,000 employees weremade redundant?
Suppliers say falling consumption and the very risky bet onexpansion could put the biggest Romanian retailer out ofbusiness.
Partner banks and around 400 suppliers have almost 60m euros torecover from Pic, according to the data provided by Ilie Penescu.Last year, Pic SA company posted 154m-euro turnover and total debtsof 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 livingstandards. They also made a mistake in expanding with money fromsuppliers," a distributor states.
"I am sure Pic's insolvency is rather related to the management ofthe business, than to the current market context," says AdrianManolache, general secretary of the Association of Large RetailNetworks in Romania.
Cornel Penescu's arrest was also a heavy blow to Pic's retailbusiness. Most suppliers halted deliveries to Pic before thenetwork filed for insolvency.
Ilie Penescu in July announced he hired several consultants to findinvestors that should buy Pic hypermarkets' spaces in a sale andlease back system, which would have allowed the network to continueits operations. No buyers were found, though, but a financialrestructuring process was started with the aid ofconsultants.
Battling with very strong international players, all the threeRomanian operators that have bet on the "star" retail segment inthe past five years are now insolvent.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
