Recent investigations have cast a shadow over luxury fashion giants Dior and Giorgio Armani, revealing stark disparities between the production costs of their high-priced merchandise and the conditions under which these items are made.
Owned by LVMH, Dior is renowned for its opulent handbags, apparel, and accessories, often priced well above $1,000. However, Italian authorities investigating LVMH’s operations found that Dior paid a mere $57 to produce a handbag that retails for $2,780, as reported by the Wall Street Journal. Similarly, Giorgio Armani paid $99 for bags sold at over $1,900.
The investigation uncovered that these cost prices exclude raw materials like leather, with additional expenses such as design, distribution, and marketing borne separately by the companies.
Both luxury brands are accused of exploiting foreign workers through subcontracted factories, a practice allegedly aimed at reducing production costs. LVMH, specifically, faced legal action in Milan after subcontracting work to Chinese-owned firms accused of labor mistreatment. Workers were reportedly subjected to grueling conditions, including sleeping in factories to maintain round-the-clock production.
Safety measures were reportedly compromised, with machinery operated at unsafe speeds after safety devices were removed—a move intended to cut costs and meet production quotas, according to Reuters.
Authorities criticized Dior for failing to monitor and audit the working conditions at subcontracted factories, highlighting a systemic oversight in supplier management.
The fashion industry’s struggle with worker exploitation is not confined to luxury brands. Earlier this year, fast-fashion retailer Shein faced scrutiny for labor violations, including extended work hours and inadequate workplace safety, despite previous promises to improve conditions.
These revelations underscore ongoing challenges in ensuring ethical practices throughout global supply chains, prompting renewed calls for transparency and accountability within the fashion sector.
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