ALICANTE, Spain--The acquisition of Pepe Penalver by the Climent Brothers in 2010 has run into some tough seas.

As a result, the pair are trying to renegotiate the bank loans they incurred when they bought Pepe Penalver for six million Euros. The two brothers, Juan and Jose Climent dramatically increased the size of their textile holdings to about 40 million Euros annually with that acquisition. It included acquiring four large stores in Madrid, Barcelona, Valencia and Alicante, Spain.

“From now on and through the Court via the default, we will continue negotiating in order to reach an agreement with banks and solve the situation,” Alhambra CEO Juan Garcia Climent told F&FI. Alhambra is the parent company of Pepe Penalver and Lizzo.

“Lizzo is a profitable company and with a great future,” he stressed. “Both our Companies Lizzo and Pepe Peñalver are solvent and profitable. Lizzo has been successfully growing since the last years – and still is; enjoying profit and sustainable sales revenue.”  

“We are not in a bankruptcy situation, Climent said. There have been rumors to that effect which he denies. The reality of the situation is that  “Lizzo has voluntarily filed a Default process through which we will be capable of returning back to the banks the loans we acquired regarding our acquisition of Pepe Peñalver Group  back in  2010. We have tried negotiations with the banks but unfortunately we still did not reach an agreement. Our business will remain exactly the same. We count on the support of our suppliers, our strong team and our great reputation in the market and more than 20 years of  positive experience and growth.”

Climent said the new 2014 collections are in progress and his  design team is working to launch at Paris Deco Off 2014, where Lizzo, Penalver  will be exhibiting. He is currently visiting with suppliers to explain the situation personally.