Italian prosecutors reveal Dior and Armani paid subcontractors minimally to produce luxury handbags retailing for thousands. Investigations highlight labor exploitation and safety violations, prompting judicial action. The revelations underscore systemic issues in luxury fashion supply chains.
Italian prosecutors have unveiled startling revelations about labor practices within the luxury fashion industry, specifically concerning Dior and Armani subcontractors. According to investigations, Dior paid a mere $57 to subcontractors for each retail handbag for approximately $2,780, excluding raw material costs. This stark difference has raised serious ethical and legal concerns, as it suggests significant profit margins achieved through exploitative labor conditions.
The probe, conducted in Milan, exposed the use of Chinese-owned firms employing workers, many of whom were from China and some without proper documentation. Workers reportedly endured grueling conditions, including round-the-clock production schedules facilitated by inadequate sleep arrangements and the removal of safety devices on machinery to enhance output.
Prosecutors further criticized Dior for failing to monitor and ensure fair labor practices among its subcontractors adequately. This negligence, as documented in court proceedings, highlighted systemic issues within the luxury goods sector, where cost-cutting measures often compromise worker welfare.
Similarly implicated, Giorgio Armani faced allegations of paying $99 per bag to subcontractors for products retailing over $1,900, underscoring widespread industry practices aimed at maximizing profit margins at the expense of ethical labor standards.
In response to these findings, Italian judges have ordered judicial administration for the Dior and Armani units for one year, allowing them to continue operations under strict oversight. This decision reflects a broader effort to enforce compliance with labor laws and curb unfair competition practices in the luxury market.
The implications extend beyond individual brands, pointing to a pervasive challenge in supply chain management across the luxury sector.
As consumers and regulators demand greater transparency and accountability, these revelations serve as a stark reminder of the ethical responsibilities incumbent upon global luxury brands in their sourcing and manufacturing practices.