French luxury fashion house Dior, a subsidiary of luxury giant LVMH, has been put under administration by a Milan court for working with Chinese-owned companies that mistreat and exploit their workers. The investigation by the Milan court follows similar investigations into leather goods maker Alviero Martini and the Giorgio Armani group.
The luxury industry’s supply chain has come into scrutiny by consumers over the past few years, dually fuelled by a decline in quality and increased awareness around the treatment of workers. Further to this, there is also more awareness around tactics employed by brands to secure ‘Made in Europe’ labels; the largest one being the production of products in low-cost labour markets overseas, which are then ‘finished’ in Europe.
The investigation into Dior commenced in March and focused on four factories—AZ Operations, Davide Albertario Milano, New Leather Italy, and Pelletteria Elisabetta Yang—which were located on the outskirts of Milan and employed a combined total of 32 workers, two of whom were in Italy illegally and seven without the necessary documentation.
In a copy of the court ruling viewed by Reuters, judges said the workers were made to sleep in the workplace in order to have “manpower available 24 hours a day.” The warehouse was fitted with a kitchenette, seven sleeping rooms, and two bathrooms, with workers living in poor sanitary conditions.
In a factory in Opera, near Milan, the carabinieri (investigators) found 17 Chinese and 5 Filipino workers working among solvents and flammable glues, using tampered machines. The document stated that safety devices had been removed from production machinery to allow them to operate faster. In carabinieri, three workers attempted to flee the factory upon the arrival of the carabinieri. Working conditions were similarly poor, with workers instructed to lie in the case of an inspection.
Outsourcing production to these Chinese-owned companies allowed for cost cutting, with contractors charging Dior as little as €53 (approx. $86AUD) for handbags that retailed in boutiques for €2600 (approx. $4218AUD). The handbag in question wasn’t specified, however the final sales price aligns with the Dior Book Tote.
According to judges, Dior did not adopt “appropriate measures to verify the actual working conditions or the technical capabilities of the contracting companies.” The court ordered Manufactures Dior SRL, wholly owned by Christian Dior Italia SRL, to be placed under judicial administration for one year.
The owners of the contracting and subcontracting companies are under investigation by Milan prosecutors for exploiting workers and illegal employment, however Dior faces no criminal investigations.
Note: Dior is a subsidiary of luxury giant LVMH, while Christian Dior SE is a separate publicly listed company controlled by the Arnault family, which is the largest shareholder of LVMH with a 42% stake in the conglomerate.
Words by Theo Rosen
