ASIATODAY.ID, JAKARTA – The well-known fashion brand Christian Dior or more commonly called DIOR is suspected of allowing and encouraging labor exploitation by Chinese subcontractors.
An Italian subsidiary of French luxury brand giant LVMH that makes DIOR brand handbags was reportedly placed under court administration on June 10, 2024. This came after an investigation stated that the company had transferred employment contracts to Chinese-owned companies that abused workers.
Quoted from TFL, June 12 2024, this is the third decision like this this year by the Milan court responsible for preventive measures. They last April appointed a commissioner to run the company owned by the Giorgio Armani fashion group because they were deemed negligent in supervising suppliers. The probe comes amid increasing consumer and investor attention to luxury goods companies’ supply chains.
Italy is home to thousands of small manufacturers accounting for 50-55 percent of global production of luxury clothing and leather goods.
Milan court ordered Manufacturer DIOR SRL Placed under judicial administration for one year. The company will continue to operate during this period. DIOR’s investigation focused on four Chinese suppliers who employed 32 workers around Milan, two of whom were illegal immigrants while seven others worked without the necessary documents. Staff live and work in hygiene and health conditions that are below minimum standards.
LVMH has not released an official comment to date. LVMH shares reportedly fell to their lowest point after news of the court decision. DIOR is LVMH’s second largest fashion label. Christian Dior SE is a separate holding company, controlled by France’s Arnault family, which owns a 42 percent stake in LVMH.
In a 34-page ruling, the judge said that workers were forced to sleep on the job so they would have labor available 24 hours a day. Electricity consumption data mapping shows a smooth day-night production cycle, including during holidays.
In addition, safety devices were removed from the machine to allow it to operate more quickly, according to the document. This allows contractors to control costs and charge DIOR the lowest possible prices.
For example, the Dior model PO312YKY is sold in stores for 2,600 euros, even though it only costs 53 euros to make. The owner of the contracting company and its subcontractors are being investigated by Milan prosecutors for exploiting workers and employing people illegally, while DIOR itself is not facing a criminal investigation.
Armani’s investigation also revealed that the Italian fashion brand’s suppliers included Chinese manufacturers in violation of worker protection laws. The Armani Group said at the time that it always strives to minimize abuse in its supply chain.
Italian authorities have been investigating the working conditions of luxury goods manufacturers’ subcontractors for several years. The move comes to address concerns that China-led “low-cost” companies are hurting Italy’s traditional leather industry, which produces about 50 percent of the world’s luxury goods. (ATN)
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