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.



UK Retailer Debenhams Announces Return of McDonald as New Chair

FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
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UK Retailer Debenhams Announces Return of McDonald as New Chair

FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Debenhams logo is seen on smartphone in front of a displayed Boohoo logo in this illustration taken January 25, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

British fashion retailer Debenhams said on Friday Iain McDonald has returned to its board as chair, replacing Tim Morris, as the company looks to focus on rebuilding its equity value after completing the initial stage of its turnaround.

Here are some details:

McDonald stepped down in February after Debenhams launched an equity raise, in which McDonald and his fund Belerion Capital invested about $5 million, making him ⁠the ninth largest ⁠investor in the group, per LSEG data.

McDonald, who had served as a non-executive director since June 2017, stepped down to facilitate his fund's participation in the funding earlier this year.

McDonald ⁠is currently chair and investor at London-listed cosmetics group Revolution Beauty, whose shares have soared over 60% so far this year.

Debenhams, formerly known as Boohoo, has seen its shares rise 8.6% so far this year.

Debenhams on Thursday reported a 13.9% rise in first-half adjusted core profit, driven by a return to growth at ⁠major brands ⁠including PrettyLittleThing, boohoo and Karen Millen.

Morris is stepping down with immediate effect after serving as chair for nearly two years and oversaw the group's new strategy, which was led by CEO Dan Finley.

As part of Friday's changes, Debenhams also appointed Michael Stewart and Stephen Rothwell as independent non-executive directors, bringing expertise in capital markets, investment management, technology and AI-enabled consumer platforms.


Next Nudges Up Profit Guidance but Sees UK Headwinds

Shoppers walk past a NEXT retail store in London, Britain, January 2, 2025. REUTERS/Hollie Adams/File Photo
Shoppers walk past a NEXT retail store in London, Britain, January 2, 2025. REUTERS/Hollie Adams/File Photo
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Next Nudges Up Profit Guidance but Sees UK Headwinds

Shoppers walk past a NEXT retail store in London, Britain, January 2, 2025. REUTERS/Hollie Adams/File Photo
Shoppers walk past a NEXT retail store in London, Britain, January 2, 2025. REUTERS/Hollie Adams/File Photo

British clothing retailer Next edged up its annual forecast on Thursday, as it reported a 10.5% profit rise for its first half, but expects sales growth to slow in its second half and warned of headwinds in its core UK market.

The group, which trades from more than 800 stores in the UK and Ireland, including Reiss, Joules and FatFace outlets, and has an online ⁠operation serving the ⁠UK and overseas markets, said full price sales were 7.7% higher in the six months to August 1, helped by a hot summer in Britain.

But it said full price sales growth would slow to 5.8% in its second half, and moderated its second half sales growth expectations for the UK to 2.0% from 2.8%, flagging concerns in its ⁠home market which accounts for about three quarters of sales.

"Our primary concerns are rising inflation, higher mortgage interest costs and a weak employment market. These worries will only be compounded if they are accompanied by tax increases," it said in reference to new finance minister John Healey's first budget on October 28.

"It seems likely that it (the government) will have to increase taxes in order to fund its expenditure,” Reuters quoted it as saying.

British households will see their energy bills rise in October, inflation ticked up on Wednesday, and, last week, Next rival John Lewis highlighted a tough UK ⁠trading environment, saying ⁠consumers were holding back on bigger ticket items.

Rival Primark said trading in continental Europe remained challenging, though Zara owner Inditex reported a strong start to autumn trading.

Next made a profit before tax of £569 million ($762 million) in its first half. It said its international business had made an encouraging start to the season, and raised its second half sales growth guidance to 20.5%.

The retailer, whose shares have increased by a quarter over the last year, raised its profit before tax guidance for its year to January 2027 by £12 million ($16 million) to £1.255 billion, reflecting the small upgrade in sales expectations and some additional cost savings, mainly in warehousing. It made £1.158 billion in 2025/26.


Ukrainian Fashion Designer Debuts Art between Air Raids

An empty street near the Ukrainian Foreign Ministry in Kyiv. (Asharq Al-Awsat)
An empty street near the Ukrainian Foreign Ministry in Kyiv. (Asharq Al-Awsat)
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Ukrainian Fashion Designer Debuts Art between Air Raids

An empty street near the Ukrainian Foreign Ministry in Kyiv. (Asharq Al-Awsat)
An empty street near the Ukrainian Foreign Ministry in Kyiv. (Asharq Al-Awsat)

In Kyiv's largest art museum, Arina Petrova and her father Serhii busily applied the final touches to their mannequins, anxious that a Russian drone attack could delay her long-awaited debut.

The fashion-designing duo from Ukraine's "Bob Basset" art house were about to present Petrova's first ever collection -- an array of punk leather animal costumes.

But with Russian jet-powered drones now crashing into Ukraine's capital on a daily basis, triggering air alerts that paralyze life in the city, the pair had more pressing concerns.

"If it's in the shelter, fine -- we'll do it in the shelter," Petrova told AFP, adding she was prepared to bring all the models and their cellist down to the basement to showcase their work.

Petrova and her 50-year-old father run their punk fashion studio out of Kharkiv, a heavily attacked city close to the Russian border.

Having arrived to the capital by minibus, their designs in hand, the pair wanted to show through their art that Kharkiv was still very much alive.

Petrova was concerned that a drone could cut things short.

"We want to have time to say what we want to say," the 28-year-old said with a sigh.

If halted, they would continue underground -- even if they had to use the flashlights on their cellphones to light up the show, she said.

As Petrova adjusted the lace on a corset, an alarm started blaring: Russian jet-powered drones were approaching the capital.

Security guards evacuated the audience.

Outside, a woman in a red dress posed for a photographer. There was a heavy explosion, she flinched, and without hesitation, resumed her pose with a smile.

In the distance, a plume of black smoke rose among the buildings.

- 'Become a little more ferocious' -

While other designs on display at Kyiv Fashion Week were full of color, Bob Basset's collection was monochrome.

In front of large black drapes, the designers adjusted a black leather breastplate adorned with a feather-like design, to be paired with a black horse mask.

For her first collection, entitled "Mutabor" ("I shall transform," in Latin), Petrova based her designs on creatures her father had imagined -- dark, feathered animals with claws.

"I feel like during war, everyone has to become a little more ferocious... grow fangs," the designer told AFP.

"You acquire something from the animal that makes you stronger."

Before Russia invaded in February 2022, Bob Basset had built a reputation designing leather masks, some of them worn by metal bands Korn and Slipknot.

But as Russian troops approached the outskirts of Kharkiv in 2022, the group closed their workshop and the family moved west.

Far from his hometown, Serhii sank into depression.

Leaving his wife and children safe in Europe, he returned to Kharkiv, under bombardment.

"I'm afraid," he said. "But I'm even more afraid of not being able to do anything tomorrow."

Their collection at Kyiv Fashion Week is their first in 11 years.

- Fashion amid the bombs -

Wearing a mask himself to hide a squint, Serhii has made face coverings the focus of his work -- a way to reinvent his identity.

He began creating masks for free for wounded soldiers who wanted to hide their scars.

His daughter joined him, and despite the sleepless nights, the workshop in Kharkiv came back to life.

"If I hadn't come back, this collection would never have existed," she said.

With just a few minutes to go before the show, Petrova appeared agitated.

In Kharkiv, anxiety kept her awake at night, as Russia bombed warehouses and logistics centers, complicating their work.

"If something hits the studio, everything we've worked on for a year will be gone," she said.

"Every day, there's this feeling that we have very little time. Something could happen, and you'll never be able to finish."

During a brief moment of respite from incoming strikes, a cellist played for a few moments.

Then, silently, the models made their way through the crowd, their faces masked, amid the flashes of cell phones.

The performance ended in a mix of applause and air raid sirens.

A woman approached Serhii to congratulate him, wearing a dress made from pieces of drones.

In the courtyard, Petrova smiled, despite the explosions from air defenses in the sky overhead.

She's used to it. In Kharkiv, "only those who are capable of creating under these conditions remain," she said.