Penescu brothers competing for Carrefour's market

The PIC group of Pitesti, which has annual revenues worth over 50 million euros, is trying to work its way onto the highly competitive Romanian hypermarket sector, with the Penescu brothers preparing to battle the Carrefour, Cora and Real international groups.
The Pitesti-based Pic group, a business developed from scratch by brothers Ilie and Cornel Penescu, has earmarked investments of 25 million euros per store in order to create their own chain of eight hypermarkets by 2010.
“We plan to gain a leading position on the hypermarket segment over the next five years,” stated Pic group representatives. The Pic group is building and designing its hypermarkets by itself, which allows it to save up to 40% in terms of investment costs per outlet.
“On average, the next hypermarkets are going to be twice as big as the hypermarket we currently manage in Pitesti. The fourth or the fifth outlet will be opened in Bucharest and afterwards we will also build a regional distribution centre,” specified Liviu Facaleata, general manager of Pic group.
Next year the group will open two hypermarkets with a sales area exceeding 10,000 square metres in Craiova and Braila. The Penescu brothers started their own business in the trade sector in 1991, and then gradually expanded their portfolio, which now also includes a rice plant, a vegetable oil bottling line, sugar packaging lines, a distribution company, a freight shipment company, a local taxi firm, a publishing house and a printing house.
They have recently become the majority stakeholders of FC Arges, which play in the top flight of Romanian football. “We estimate our investment in FC Arges at 3 million euros, which is a positive investment that we hope will promote a positive image nationwide. Instead of investing in mass media advertising, we are investing in football,” stated Cornel Penescu.
The new stores will be 75% financed through banking loans, largely contracted from BCR.
At the moment, the hypermarket segment is highly competitive, with many players banking on an increasingly high volume of sales, for profit, even though profit margins are lower in the modern trade than in the traditional one.
International groups have a competitive edge because they have cheaper financing sources, coupled with decades of know-how in the hypermarket business. Despite this there are some Romanians trying to push their way onto this market.