Trial of Chinese Crime Gangs in Italian Fashion Stalls amid Sabotage Fears

Italian Guardia di Finanza (Tax Police) carry out a search at a textile firm during an investigation, in the Tuscan city of Prato, Italy, in this handout photo obtained by Reuters. Guardia di Finanza Press Office/Handout via REUTERS
Italian Guardia di Finanza (Tax Police) carry out a search at a textile firm during an investigation, in the Tuscan city of Prato, Italy, in this handout photo obtained by Reuters. Guardia di Finanza Press Office/Handout via REUTERS
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Trial of Chinese Crime Gangs in Italian Fashion Stalls amid Sabotage Fears

Italian Guardia di Finanza (Tax Police) carry out a search at a textile firm during an investigation, in the Tuscan city of Prato, Italy, in this handout photo obtained by Reuters. Guardia di Finanza Press Office/Handout via REUTERS
Italian Guardia di Finanza (Tax Police) carry out a search at a textile firm during an investigation, in the Tuscan city of Prato, Italy, in this handout photo obtained by Reuters. Guardia di Finanza Press Office/Handout via REUTERS

A landmark trial in Italy of Chinese crime gangs has suffered so many mishaps - from the disappearance of documents to the resignation of interpreters - that a senior prosecutor suspects it's being sabotaged to protect the criminals' grip on Europe's fashion industry.

The case, launched after two Chinese men were hacked to death with machetes in 2010, is aimed at dismantling an illicit network accused of controlling the logistics of the continent's multi-billion-euro garments sector from the city of Prato in Tuscany.

Instead, it has become a cautionary tale about the obstacles Italy's justice system faces when confronting international organized crime without the tools it has used effectively to fight home-grown mafia groups, prosecutors say.

Reuters spoke to two of Italy's most senior anti-mafia investigators, and more than half a dozen textile workers, union representatives and defense lawyers, to gain a rare glimpse into the challenges of tackling alleged Chinese organized crime.

"The suspicion is that there is interference from the Chinese community and Chinese authorities in this matter," said Luca Tescaroli, a veteran of Italy's war against the mafia who is now Prato's chief prosecutor and leading the charge against Chinese crime gangs.

The Chinese embassy in Rome did not reply to emails requesting comment on Tescaroli's remarks. China's foreign, public security and justice ministries did not immediately reply to Reuters' requests for comment for this story.

When the latest court interpreter failed to show up to a hearing at the end of September, a quick check revealed she had returned to China and her transcripts were "incomprehensible and unusable", Tescaroli said.

The translator was the second to walk off the job and no other Chinese interpreter in Tuscany has agreed to take over. Tescaroli has opened an investigation into the possibility that someone is looking to sink the trial.

The violence prosecutors hoped to curb has only intensified as the trial flounders, with the battle for control of coat hanger production and fast-fashion freight spawning a string of bomb and arson attacks in Italy, France and Spain.

There have been at least 16 attacks, including cases of the destruction of property, since April 2024, according to a Reuters tally of official reports.

The Prato prosecutor and his colleagues are pressing the judges in the so-called China Truck trial to define the Chinese gangs legally as mafia groups – a designation that would unlock sweeping powers, asset seizures and stiffer sentence.

However, in Italy that label is difficult to secure, even more so if the organizations are rooted abroad, making them harder to penetrate than home-grown crime groups such as Sicily's Cosa Nostra.

Wedged in the hills northwest of Florence, Prato is billed as Europe's largest textile manufacturing hub, hosting more than 7,000 textile and garment companies that register some 2.3 billion euros ($2.68 billion) in official annual exports. Over 4,400 of firms are Chinese owned, local authorities say.

Almost a quarter of its residents are foreigners, the largest ratio in Italy, but the percentage is likely much higher as many newcomers are illegal immigrants without work permits.

Prato's streets are lined with Chinese-owned workshops, warehouses, and businesses that have transformed the city into a global fast-fashion production center, and a flashpoint for violence linked to criminal networks.

The China Truck investigation closed in 2018 with prosecutors alleging that the 58 suspects had formed "a criminal association equipped with very significant financial means ... with support and resources abroad".

Seven years on, not a single defendant or witness has been called to testify.

Meanwhile, the alleged mastermind Zhang Naizhong, described by investigators as a "boss of bosses", slipped back to China in 2018 after he was released from pre-trail custody and prosecutors doubt he will ever return to Italy.

His Italian lawyer Melissa Stefanacci declined to comment on any aspect of the case. Zhang and the other suspects have pleaded not guilty.

The case emerged from what Francesco Nannucci, then head of Prato's police Flying Squad, described to Reuters as a war between two rival gangs, one made up of Chinese originally from Zhejiang and the other of Chinese originally from Fujian, for control of territory in Europe.

Despite keen police interest and multiple investigations in Prato, the gang violence has escalated in the past two years.

In July 2024, a Chinese businessman based in Prato was stabbed multiple times by a group of six men, including a former soldier, who had flown in from China "to protect, through violence, the business interests of the monopolistic group in the coat-hanger sector," prosecutors said in a statement.

All six were arrested and sentenced to 7.5 years in jail for attempted murder.

In April of this year, Zhang Dayong, Zhang's alleged right-hand man who was also charged in the China Truck case, was shot dead in Rome alongside his girlfriend. No-one has been arrested for those killings.

Tescaroli said emerging companies often with the prefix "Xin" - meaning "new" in Chinese - were trying to undercut established players, selling hangers at about 6 cents each compared to the previous market rate of about 27 cents.

"Since the volumes are vast, a few cents of margin on each piece guarantee gigantic profits," he said.

Chinese businesses in the textile district have long operated within what investigators call the "Prato system", marked by corruption and irregular practices, including labor and safety abuses as well as tax and customs fraud. These companies can appear and disappear overnight, engaging in a cat-and-mouse game with authorities to dodge taxes and avoid having to give workers proper contracts, according to Arturo Gambassi, a representative from the Sudd Cobas union, which defends workers' rights in the textile sector.

"In all the firms where we have initiated labor disputes, we saw that their business name had changed in the previous two years," he told Reuters. Police say fabrics are often smuggled in from China to avoid customs duties, while profits are sent back through illicit money-transfer channels, with up to 4 million euros shipped out of Rome's Fiumicino airport each week, according to prosecutors and police.

To maintain their competitive edge, the industry depends on cheap, round-the-clock labor, largely from China and Pakistan, with workers facing a backlash if they seek legal contracts.

On November 17, more than 15 Chinese citizens assaulted a union demonstration in Prato. Plain clothes police who were observing the protest were also attacked, with two officers needing hospital treatment, a police statement said.

Italian prosecutors succeeded in dismantling major Italian mob networks, notably Cosa Nostra, in part thanks to legislation introduced specifically to tackle the mafia.

The official mafia designation carries stiffer sentences and lets courts infer membership from conduct, a key advantage when prosecutors must overcome silence and intimidation.

Tescaroli is trying to get the courts to brand the Chinese gangs as mafia groups, but Barbara Sargenti, Italy's national anti-mafia prosecutor, questioned whether this would happen.

To establish that there is a Chinese mafia, Italy needs to map these organizations either from inside sources or with help from judicial and police authorities in China.

Sargenti said cooperation with China was proving "very difficult" and, so far, only one Chinese citizen had turned state witness within Italy, in a drug-related case.

Sargenti said China's police and judicial authorities had been in touch with Italy's justice ministry in recent months, saying it was willing to send officers collaborate with the Italians but there had been no follow up.

"Investigations are, let's say, very complicated," she said. Without the mafia designation or Chinese cooperation, Tescaroli's case in the China Truck trial relies on the fragile scaffolding of Italian procedure, and the willingness of translators to show up.

After the Tuscan interpreters made themselves unavailable, two new translators were appointed on November 17 - Chinese citizens from the northern port city of Genoa, outside Tuscany.

But court officials aren't claiming victory, yet, with the new translators saying they could not guarantee they would understand the dialects captured in phone taps that form crucial evidence in the case. The next hearing is scheduled for May 15.



Kering Seeks to 'Reignite Desirability' with Gucci Reset

(FILES) This illustrative photograph shows screens displaying the logo of the French company Kering, listed on the CAC 40, the main stock market index of the Paris Stock Exchange, in Toulouse on March 31, 2026. (Photo by Lionel BONAVENTURE / AFP)
(FILES) This illustrative photograph shows screens displaying the logo of the French company Kering, listed on the CAC 40, the main stock market index of the Paris Stock Exchange, in Toulouse on March 31, 2026. (Photo by Lionel BONAVENTURE / AFP)
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Kering Seeks to 'Reignite Desirability' with Gucci Reset

(FILES) This illustrative photograph shows screens displaying the logo of the French company Kering, listed on the CAC 40, the main stock market index of the Paris Stock Exchange, in Toulouse on March 31, 2026. (Photo by Lionel BONAVENTURE / AFP)
(FILES) This illustrative photograph shows screens displaying the logo of the French company Kering, listed on the CAC 40, the main stock market index of the Paris Stock Exchange, in Toulouse on March 31, 2026. (Photo by Lionel BONAVENTURE / AFP)

French luxury group Kering vowed Thursday to "reignite desirability" of its flagging Gucci label, once the jet set's most coveted brand, as it seeks to turn around its financial performance.

The giant Paris-based fashion conglomerate, which also owns Yves Saint Laurent and Bottega Veneta, chose Florence, the birthplace of its flagship double-G brand, to unveil its turnaround plans to investors.

Kering plans a "structural reset" to be completed by the end of the year that will make it more efficient in order to improve margins and restore financial discipline to its brands, AFP quoted the company as saying.

Kering promises to offer "the agility of a challenger, a renewed focus on desirability and a stronger commitment to execution," Chief Executive Luca de Meo said in a statement.

Whether Kering's new plan -- called ReconKering -- will be enough to revive the struggling Gucci brand is yet to be seen, especially given the tough selling environment facing the entire luxury sector amid geopolitical tensions and more cautious consumer spending.

Long the bright spot in Kering's portfolio and the darling of the fashion set before the Covid pandemic, sales of Gucci have since slumped by over a third to six billion euros last year.

While Gucci accounted for two-thirds of Kering's sales in 2019, that share fell to under 40 percent in 2025, pointing to its lackluster reception by luxury shoppers.

Profitability also sagged over this period.

Last year, Kering brought in Georgian Gen Z streetwear favorite Demna as Gucci's new artistic director while poaching De Meo from Renault, where he revitalized the automaker's lineup and financial performance.

Kering said it will go about "reigniting desirability by refocusing the brand around what makes it unmistakably Gucci, with clear creative direction, disciplined codes and a revitalized heritage with true cultural impact."

Sales in Gucci's first quarter declined by 14 percent to 1.35 billion euros, hit by shrinking demand in its key market of China and a cautious consumer environment due to the war in the Middle East.

Shares of Kering fell nearly two percent on the Paris stock exchange, underscoring investor's tepid response to the turnaround plans.

Kering gave few clues as to how exactly it would right the ship at Gucci, which enjoyed its headiest days under designer Tom Ford in the 1990s, who turned the leather goods brand into a fashion powerhouse beloved of the jetset.

"Gucci has had all sorts of issues. It's had issues on distribution. It's had issues on product. It's had issues on pricing," said Flavio Cereda, a luxury sector specialist at GAM, an investment firm, ahead of the investor day.

"Do people care about Gucci today? I don't think they do. Can people care about Gucci in six months' time? It's perfectly possible. We just don't know."

Kering said a new group platform will consolidate key functions such as purchasing, logistics, research and development and quality control for all its brands.

That will allow each brand within the portfolio to operate with more "power, speed and efficiency", Kering said.

For the group as a whole, Kering envisions doubling its recurring operating margin in the medium term to reach at least 22 percent, while improving its return on capital -- another measure of profitability -- by 20 percent, helped by more controlled inventory and selective investments.

By the end of 2028, Kering said, the group "will be in a phase of renewed, sustainable growth."


Kering Shares Slide After Gucci Sales Disappoint

A logo of fashion house Gucci is seen outside a shop in Paris, France, April 15, 2024. (Reuters)
A logo of fashion house Gucci is seen outside a shop in Paris, France, April 15, 2024. (Reuters)
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Kering Shares Slide After Gucci Sales Disappoint

A logo of fashion house Gucci is seen outside a shop in Paris, France, April 15, 2024. (Reuters)
A logo of fashion house Gucci is seen outside a shop in Paris, France, April 15, 2024. (Reuters)

Kering shares plunged as much as 10% on Wednesday after first-quarter sales at its Italian flagship brand Gucci dropped more than expected, underlining the challenges in reviving the brand's appeal.

Gucci sales fell 8%, the 11th straight quarterly decline, as the Iran war weighed on spending by Middle Eastern shoppers and curtailed international travel.

Shares ‌were down ‌8.5% to 255 euros at ‌0827 ⁠GMT and on ⁠track for their steepest daily decline in more than a year.

The result came days before Kering CEO Luca de Meo is due to unveil his strategic plan to turn around the 33-billion-euro ($39 ⁠billion) group's fortunes.

"While guidance was ‌confirmed, the timeline ‌for a Gucci turnaround remains uncertain and likely ‌gradual, against a challenging macro backdrop and ‌ongoing geopolitical tensions," Citi analysts wrote.

Like larger peers LVMH and Hermes, Kering is facing deteriorating demand from customers impacted by the conflict in the ‌Middle East.

Kering said it had seen strong demand for Gucci ⁠products ⁠in North America, but JPMorgan analysts said this was likely a trend for all luxury brands, rather than just Gucci, and pointed to double-digit declines in all other regions.

"This suggests, in our view, that the turnaround will take a lot longer, and much more work, than the bulls would hope for," they said.

Kering shares are down around 7% so far in 2026.


Texas Attorney General Probes Lululemon over Potential 'Forever Chemicals'

FILE PHOTO: A Lululemon sign is seen at a shopping mall in San Diego, California, US, November, 23, 2022.  REUTERS/Mike Blake//File Photo
FILE PHOTO: A Lululemon sign is seen at a shopping mall in San Diego, California, US, November, 23, 2022. REUTERS/Mike Blake//File Photo
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Texas Attorney General Probes Lululemon over Potential 'Forever Chemicals'

FILE PHOTO: A Lululemon sign is seen at a shopping mall in San Diego, California, US, November, 23, 2022.  REUTERS/Mike Blake//File Photo
FILE PHOTO: A Lululemon sign is seen at a shopping mall in San Diego, California, US, November, 23, 2022. REUTERS/Mike Blake//File Photo

Texas Attorney General Ken Paxton has launched an investigation into athleisure brand Lululemon over the potential presence of "forever chemicals" in its activewear, he said on Monday in a post on social-media platform X.

The probe will examine whether Lululemon's athletic apparel contains PFAS, which the brand's health-conscious customers would not expect based on its marketing, Paxton said. PFAS, or per- and polyfluoroalkyl substances, are a group of widely used materials called "forever chemicals" because they do ⁠not break down easily ⁠in nature.

"Lululemon does not use PFAS in its products," a company spokesperson said, adding it phased out the substance in fiscal 2023, after limited use in durable water repellent products.

According to Reuters, Attorney General Paxton said emerging research and consumer concerns have raised ⁠questions about whether certain synthetic materials in the apparel could be linked to endocrine disruption, infertility, cancer and other health risks.

PFAS are associated with harmful health effects in humans and animals, according to the US Environmental Protection Agency.

The Office of the Attorney General will examine Lululemon's testing protocols, restricted substances list and supply chain practices against state safety standards.

"If Lululemon has violated Texas law, it will be ⁠held accountable," Paxton ⁠said in his post.

The company spokesperson said they are aware of the inquiry and are cooperating.

Earlier this year, the company had to pull its "Get Low" workout collection from its website following user complaints, only resuming online sales after addressing the issues.

Lululemon, which appointed a former chief of jeans maker Levi Strauss to the board last month, has forecast weak annual results amid tepid demand and an ongoing proxy fight with its founder.