Home » Raids on luxury brands in Italy raise concerns over exploited work

Raids on luxury brands in Italy raise concerns over exploited work

Raids on luxury brands in Italy raise concerns over exploited work

A recent report by the Wall Street Journal on a series of raids in Italy concerning the production of luxury goods by some leading brands has raised concerns over exploited work and prompted a heightened social media debate and criticism among users.

“An investigation by Milan prosecutors into working conditions at local factories found workshops making handbags and other leather goods for Dior and Armani used exploited foreign labor to produce the high-end products at a fraction of their retail price,” the report by the U.S. daily said earlier this week, detailing the prices and court findings.

Dior paid a supplier 53 euros per piece, roughly $57, to assemble a handbag that it sells in stores for 2,600 euros, or about $2,780, according to documents examined as part of the probe.

Armani bags, meanwhile, were sold to a supplier for 93 euros, then resold to Armani for 250 euros, and ultimately priced at around 1,800 euros in stores, the probe found.

Some of the raided workshops, all of which were in Italy, were also making products for other fashion brands, prosecutors said.

“Why does it cost so little to manufacture the product?” said Fabio Roia, president of Milan’s court system, which has overseen the probe. “The brands need to ask themselves this question.”

Milan prosecutors probed for a decade for illegal working conditions in sectors such as logistics and cleaning services before focusing on the luxury sector, where Italy accounts for half the world’s production, Reuters reported last month.

Luxury firms should beef up checks on suppliers to ensure they respect labor laws, according to Italy-wide proposals from Milan’s court of justice following worker exploitation probes involving units of LVMH and Giorgio Armani.

The proposed scheme, which would not be legally binding, marks an attempt by magistrates in Italy’s fashion capital to tackle what they have described in documents seen by Reuters as “a generalized manufacturing method” that put people’s lives at risk to boost profit margins.

Many luxury and fast fashion brands have found themselves in the hot water in recent years over allegations of workforce exploitation and using child labor in some South Asian nations for the sake of boosting their profit margins.

Dior, owned by luxury giant LVMH, declined to comment to the WSJ. The brand recently submitted a memorandum outlining measures to resolve issues in its supply chain, court documents show.

Armani said it had “control and prevention measures in place to minimize abuses in the supply chain,” and that it was “collaborating with the utmost transparency” with authorities.

Scandals about inhumane working conditions have plagued the fashion world for some time, especially at factories in developing countries, but social media has increased the reputation risks for brands, prompting many to bring some production in-house and curb the number of sub-contractors.

The latest report by the WSJ, which was since cited by several other publications finds its rounds on social media platform X, formerly Twitter, as some users called the practice “disgusting” and others called for the boycott of the brands.

“I hate unethical and labor-abusing companies, directly or indirectly cruel to human. More reason to boycott Dior and Armani,” a user, Zaira Idrus wrote on X.

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