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Dior and Armani investigated for labor practices – www.israelhayom.com

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A recent investigation by Italian authorities has brought to light the stark contrast between production costs and retail prices in the luxury fashion industry, focusing on industry giants Dior and Armani. According to a report by Business InsiderThe investigation uncovered questionable labor practices and eye-opening profit margins in the production of high-quality handbags.

The Italian public prosecutor’s office in Milan has conducted a comprehensive investigation into the involvement of third-party suppliers by the LVMH subsidiary Dior. The results, as reported Reutersrevealed that Dior paid just $57 to produce bags that retail for about $2,780. This figure does not include the cost of raw materials such as leather. The investigation covered not only Dior, but also Giorgio Armani’s contractors. Documents obtained by Reuters showed that Armani paid its contractors $99 per bag for products that sold in stores for over $1,900.

These revelations have raised serious concerns about working conditions and ethical practices in the luxury fashion supply chain. Prosecutors allege that subcontractors, mainly Chinese-owned firms, exploited workers to keep production running around the clock. There was evidence that some workers were sleeping in the factories, and electricity usage data suggested work was carried out at night and on holidays. The investigation also uncovered possible safety violations. Investigators said safety devices on gluing and brushing machines were removed to increase production speed, putting workers at risk.

In response to these findings, Milan judges have placed Dior and Armani’s businesses under receivership for one year, although the companies will be allowed to continue operating during this period.

Fabio Roia, President of the Milan Court, stressed in a statement to Reuters“The main problem is obviously that people are treated badly: in the application of labor laws, so in terms of health and safety, working hours, pay,” said Roia. “But there is also another big problem: unfair competition that pushes law-abiding companies out of the market.” Court documents cited by Business Insider explained: “It is not something sporadic that affects individual production batches, but a general and consolidated manufacturing method” within the industry.

LVMH, Dior’s parent company, did not immediately respond to Business Insiderfor comment. However, court documents show that Dior submitted a memo highlighting improvements in the supply chain. A spokesman for the Armani Group said Business Insider In a statement, it said: “The company has always had control and prevention measures in place to minimise the risk of abuses in the supply chain,” adding that it was cooperating with the authorities.

This investigation comes at a time when the luxury fashion industry is under increasing pressure to ensure ethical practices throughout its supply chain. According to its environmental and social responsibility report, LVMH said it conducted 1,725 ​​audits of its 2,062 suppliers and subcontractors last year.

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