A subsidiary of the luxury fashion group LVMH is said to have awarded contracts to Chinese companies in Italy that even had workers sleeping in the factory. Now, a court in Milan has reportedly placed the company under supervision.
The luxury industry is repeatedly criticized for its working conditions. Now a subsidiary of the French luxury fashion group LVMH has also been placed under judicial supervision in Italy due to alleged violations of labor protection laws. Previously, a subsidiary of Armani had also been placed under supervision for similar allegations.
According to a report by the news agency Reuters, a court in Milan has ordered that the company Manufactures Dior be placed under judicial administration for a year. This is according to a document seen by Reuters. The company is accused of awarding contracts to Chinese firms that exploited their workers. This practice is not an isolated incident but a consolidated method.
The investigations focused on four small suppliers with a total of 32 employees operating in the Milan area. Two of the workers were illegal immigrants, and seven others did not have valid work documents.
The workers were reportedly forced to sleep at the workplace in order "to be available as labor 24 hours a day." They had worked and lived under conditions that fell below the required minimum for an ethical approach. Data on electricity consumption showed "seamless day-night production cycles, even during the holidays.
Additionally, safety devices were removed from the machines in order to speed up their operation. This led to production costs being kept so low that Dior was charged only 53 euros for the manufacturing of a handbag. A Dior model, which was then sold in stores for 2600 euros, is cited as an example.
The luxury goods company LVMH did not comment on the matter according to Reuters. The company's shares fell by 1.6 percent on Tuesday.
In recent years, the supply chains of the luxury industry have come under increased scrutiny. Italy is home to thousands of small manufacturers, who, according to data from consulting firm Bain, cover about half of the world's luxury goods production.
