UPDATE: CCC fashion denies Ningi Research allegations, sees report as speculative attack

"In our opinion, the material was prepared without an adequate analysis of legal regulations and economic reality, but with a large dose of ill will and an attempt to attribute bad intentions to our company," CCC's CEO and founder Dariusz Milek told the video conference.

"The so-called report seems to have been written on the back of the envelope. All the existing facts are adjusted to fit a preconceived thesis, and its authors seem to be simply lazy. The biased interpretation of the facts seems to serve only one purpose: to make money for people who are short-selling shares," he added.

Head of the investor relations department at CCC Wojciech Latocha stated that CCC entirely questions the credibility of Ningi Research.

"It is an entity that is not registered anywhere, has no registered office, and no specific person was signed under it, so we treat it purely as a speculative attack," he told the video conference.

Ningi Research, which claims to specialise in forensic accounting, announced on Thursday that it had taken a short position on CCC shares. According to Ningi's report, CCC is a "façade built on aggressive accounting games, undisclosed related-party dealings, and a large-scale channel-stuffing scheme."

Authors of the report claim that gathered evidence suggests CCC is concealing its operational shortcomings by "selling" hundreds of millions in unwanted inventory to a captive, insolvent franchisee called MKRI. Ningi Research believes this scheme artificially inflates CCC’s reported revenue and profitability even though the cash from these sales never materialises.

MKRI operates Kaes stores, as well as Worldbox (under a franchise agreement with CCC). CCC currently holds a 10 percent stake in MKRI, which, according to CCC's deputy CEO and CFO Lukasz Stelmach, was purchased for over PLN 100,000 (EUR 23,520).

CCC is now awaiting approval from Poland's antitrust and consumer protection regulator UOKiK to acquire MKRI (it wants to buy a 41 percent stake). Stelmach estimates that the purchase price will amount to PLN 1 million (EUR 235,200). CEO Milek explained that CCC may hold between 51 percent and approximately 80 percent of MKRI. 20 percent is to remain in the hands of the current owners, who will be responsible for, among other things, the product and operations in stores in Poland. CCC itself will be responsible for Worldbox's expansion abroad.

"I think it will be a successful acquisition, once we get UOKiK's approval, and that we will quickly see PLN 1 billion in turnover," CEO Milek said.

He announced that the company expects the regulator to approve the acquisition in the coming weeks.

When asked why the group is acquiring this entity instead of building its own clothing business, Milek replied: "We are buying existing turnover and certain competencies. (...) We needed something that already exists and, in the opinion of American licensing companies, will give us the right to obtain goods licensing rights," adding that CCC is acquiring a company with problems "for nothing."

The CCC group announced that by mid-October 2025, it had generated PLN 91 million (EUR 21.4 mln) in gross margin on wholesale sales to MKRI (PLN 80 million or EUR 18.8 mln in the first half of 2025 which represents 3 percent of the group's gross margin, and PLN 122 million (EUR 28.7 mln) since the beginning of the cooperation) as part of its normal business activities consisting in the sale of products to two partner chains: Kaes and Worldbox. The group's average gross margin on this cooperation is 33 percent and, as stated, it is identical to the gross margin generated on cooperation with other partners in the wholesale business.

According to the group, this year MKRI will generate a loss similar to last year's or slightly higher, resulting from the liquidation of old goods from before the start of cooperation with the group. All goods currently purchased by MKRI from the group have a positive impact on MKRI's EBITDA. Measures are currently being taken to restructure this entity. Its results are expected to improve significantly next year.

According to Ningi's Research report, the transfer of CCC's inventories to MKRI, which began in November 2024, has since increased the group's EBITDA by nearly PLN 270 million (EUR 63.5 mln). CCC's CFO refutes these allegations, explaining that EBITDA is affected by, among other things, licence fees, logistics costs, etc. Stelmach explained that EBITDA from this cooperation could have amounted to several dozen million zlotys so far.

The authors of the report claim that their analysis shows that over PLN 330 million (EUR 77.6 mln) in receivables are associated with MKRI, of which over PLN 100 million (EUR 23.5 mln) are overdue.

CEO Milek explained that part of MKRI's liabilities stem from the fact that CCC carries out renovations and purchases furniture for the chain.

"Part of the PLN 300 million in receivables are liabilities resulting from the renovation of stores and the purchase of furniture. These are our locations. If we do not obtain UOKiK's consent, nothing will happen, because this loan is for goods that are in our stores and for furniture that is in our stores," he pointed out.

"When we take control over MKRI, the debts that exist will no longer be debts, they will be within the group. (...) We are now in a transitional period," Milek added.

CCC representatives also announced that the liabilities are being gradually repaid by MKRI.

The CEO of CCC also responded to Ningi Research's allegation that the development of the entire CCC group's network is far from its targets. The group plans to increase its retail space by 325,000 square metres in the financial year ending January 31, 2026, and so far, it has opened approximately 160,000 square metres.

"Today alone, we are opening five stores, and this pace should continue until the end of the year, as all the openings have accumulated," Milek told the video conference.

During Thursday's trading on the Warsaw Stock Exchange, CCC's share price reacted with a sharp decline to the Ningi Research report. The shares fell by as much as low double-digit percent, with high turnover. At the close of trading, the share price fell by approximately 5.3 percent to PLN 146 (EUR 34.34).

CCC announced that it is considering taking legal action against the authors of the Ningi Research report in connection with the dissemination of false information that manipulate the share price.

pel/ ao/