by For years, the buyers of scandals have been aware of the origins of cheap clothing that are sold in the High Street shops. Workers of the clothing industry that produce clothing for leading brands were beaten. There were also stories about hidden child labor, and some workers in British factories are feared to be trapped in modern slavery.
After a number of workers by the military public prosecutor, the luxury fashion industry will quickly get under similar control.
Last week, Loro Piana, the 100-year Italian brand, sold four-digit cashmere jumpers and their “quiet luxury” asthetics of celebrities such as Gwyneth Paltrow and the super-rich characters in the TV show succession were used under a 12-month court administration about the alleged exploitation of the workers.
The verdict results from an investigation of the luxurious supply chain of Italy, which began in 2023. According to the court, Loro Piana, the luxury conglomerate LVMH-Outsourced Production some clothing, including cashmere jackets, belonged to an external Chinese fashion company, which in turn divided the work into two other companies. These were illegal workshops that operated on the edge of Milan. In May, the Labor Crime Unit of the Carabinieri Military Police found that 10 Chinese, of which five migrants were without papers were forced to work up to 90 hours a week for just € 4 per hour, as reported by Reuters.
It is worth noting that the brand is not examined, and if the company meets a number of legal requirements
In a statement to the guardian, Loro Piana said that the supplier had not informed the company about the existence of subcontractors. It also said: “Loro Piana was made aware of this situation on May 20, and as a result, the maison announced all relationships with the affected supplier in less than 24 hours.”
However, the news of the order has further spoiled the idea of the label “Made in Italy”, a term that typically describes high -quality production.
Loro Piana is now the fifth fashion house, which has been put under court surveillance in Italy since 2023. Armani and LVMHS Dior have suspended both similar measures last year. In February, the surveillance arrangements were canceled early when the court said that both brands had taken all the necessary corrective measures before the 12-month period assigned to them was passed. In May, a subdivision of Valentino, Valentino Bags Lab SRL, was also placed under the judicial administration.
Last year, an investigation by the Italian police showed that Armani bags, which were carried out by a Chinese subcontractor for € 93 in retail for € 1,800 and then sold to the group for € 250 for € 250. A DIOR subsidiary was sanctioned to pay only € 53 for bags for more than 2,000 euros, reported the FT.
Loro Piana published an explanation of the difference between the price tag for his clothes and the alleged costs to produce it. According to Loro Piana’s latest Italian examination, some jackets from the brand, which are in retail retail for more than 3,000 euros, were produced for only € 118. The explanation states: “The reported costs are neither representative for the amounts paid by Loro Piana to their suppliers nor the full value of all elements, including raw materials and substances.”
For many consumers there is perception that luxury and ethics go hand in hand. But Deborah Lucchetti, who works as a national coordinator in the Italian segment Clean Clothes Campaign, a network that is dedicated to improving working conditions and strengthening workers in the global clothing industry, says that this is an illusion. “Luxury is based on a production system based on cost reduction, maximizing profits and opaque supply chains that are based on subordinate and often use immigrants who have no protection and no contracts,” she says.
Lucchetti refers to another ongoing case, where a group of employees in Tuscany in Prato, Tuscany, in which Montblanc Supply chain is busy and states that they have lost their work after they had complained against inhuman working conditions. “All of this is protected by commercial audits that protect the call of brands and not by workers,” says Lucchetti. “To be honest, where is the difference from the fast fashion?”
In a statement, Montblanc informed the Guardian that it had terminated the company’s contract because it did not comply with the supplier code of the parent company and worked with “an unknown and unauthorized subcontractor.
They added that the company in its supply chain decided to “release six workers – from an estimated 60”, 10 months after it stopped working with Montblanc.
Last year, Bloomberg investigated Loro Pianas Vicuña (a kind of South American camelide that is known for its soft wool) claimed by the underpayment of the indigenous Peruvian workers who deliver the fiber. Loro Piana denied the claim. “Since it arrived in Peru in the 1980s, Loro Piana has decided to maintain the highest standards for ethical and responsible business practices,” said the company in a statement to Bloomberg.
These recent claims are particularly challenging for the luxury industry with tariffs, wars and a volatile financial market that leads to a widespread slowdown. Regardless of whether Supply -Chain scandal consumers are putting off or not, high price hikes seem to have contributed to a strong downturn in demand. According to HSBC, luxury prices in Europe are 52% higher than in 2019. The fact that many of these pieces are manufactured for a tiny fraction of their retail price could also be deterred.
Sarah Kent, chief sustainability correspondent at The Business of Fashion, says it is difficult to determine how much the allegations will affect sales. “In the past, luxury consumers have not proven to be particularly on scandals. This time it is a feeling that the exam chains of luxury differently (and possibly more dangerous) summarize with a broader conversation about whether the products of large brands are still worth the money.
The chairman of Loro Piana, Antoine Arnault, who also monitors the environmental strategy of LVMH and his younger brother Frédéric became CEO of Loro Piana in June, previously described luxury products by nature. At the Global Fashion Summit 2023 in Copenhagen, he said: “This is what makes them so special. They are made from the materials with the highest quality; they are durable; they can be repaired. This separates us from the rest of the fashion industry.”
But the boundaries between fast fashion and luxury always seem to be blurred. Mass fashion giant regularly accuse a confused supply chain for exploitation. Some specialized work such as embroidery can be subdued, since fashion brands may not be able to do everything in -house. Luxury houses have sometimes given the impression that such special works are carried out in small craft workshops, which in turn justify higher prices for the finished product, although in fact there are some articles in larger factories that use employees.
As Lucchetti sees, the causes of exploitation must be addressed directly. “The phenomenon emphasized by the Milan public prosecutor is structurally and cannot be solved in a short time, not at all through a voluntary protocol that does not concern the basic causes of the problem: unfair commercial practices and predatory prices that are imposed by brands to suppliers, and force them to break the right and national collective contracts.”
The Italian competition authority has previously initiated parallel investigations on misleading ethical demands. In May she completed an unfair practical examination in Dior, with the brand promised to contribute € 2 million to support anti-exploitation initiatives for over five years.
Kent emphasizes the fact that the public prosecutors in Milan have “described the problems with the sub -tons of the sub -contracts identified in their investigations as a characteristic, not as a mistake in the system” and that “luxury brands should routinely bring an eye to increase the red flags to maximize profits”.
She comes to the conclusion: “Critics certainly argue that the consequences for brands that are trapped in the scandal would be too loose and changes would be if there were financial punishments for failures in due diligence.”
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