Pinko strikes strategic partnership in China amid uncertainty

Pinko, the Italian fashion brand owned by Fidenza-based Cris Conf, has announced a strategic collaboration with Lima Commercial Management, a key player in the Chinese retail market. This move comes at a critical moment for the company, which recently entered debt restructuring negotiations following challenges in its Asian operations.

Cris Conf’s financial troubles can be traced back to its aggressive expansion strategy in China. In 2019, the company secured an 81 million euro loan from a consortium of banks, initially driving growth, according to Italian news outlet Pambianco. However, the onset of the Covid-19 pandemic disrupted operations. Despite a strong recovery in 2022, when revenues surged 33 percent to 220 million euros, Pinko doubled down on its investment in China, operating 90 directly managed stores and an office with approximately 50 employees. The brand aimed to double its presence in the market, targeting 500 million euros in revenue within five years.

This ambitious strategy backfired as China’s economic slowdown weighed heavily on Pinko’s financial health. By late 2023, mounting difficulties prompted CEO Pietro Negra to seek a debt restructuring plan. However, when one of its creditor banks refused to participate, the company defaulted on its payments.

Amid these financial uncertainties, Pinko’s 500 employees face an uncertain future. On January 31, Italian union Filtem Cgil issued a statement urging urgent discussions with the company’s management. Union representatives expressed concerns over the impact of the restructuring process on the workforce and demanded transparency in decision-making, Pambianco said.

A new growth strategy in China?

Against this backdrop, the newly announced deal with Lima Commercial Management signals an attempt to revive Pinko’s Chinese market presence. The partnership will not only facilitate renewed expansion but also introduce a China-specific ready-to-wear collection, with potential future diversification into other product categories.

Despite this promising development, crucial questions remain unanswered regarding the broader restructuring strategy, including implications for production and employment. With creditors still deliberating on their course of action, Pinko’s next steps will be closely watched by industry observers and stakeholders alike.