Berliner Boersenzeitung - Italy's luxury brands shaken by sweatshop probes

EUR -
AED 4.231187
AFN 75.465623
ALL 93.264739
AMD 422.166717
AOA 1057.65216
ARS 1727.905463
AUD 1.640039
AWG 2.073829
AZN 1.963683
BAM 1.956109
BBD 2.324867
BDT 142.88258
BHD 0.435269
BIF 3449.795471
BMD 1.152127
BND 1.48007
BOB 13.961146
BRL 5.903154
BSD 1.154282
BTN 109.850883
BWP 15.611467
BYN 3.41754
BYR 22581.690677
BZD 2.321467
CAD 1.615317
CDF 2603.806986
CHF 0.936264
CLF 0.026724
CLP 1055.210169
CNY 7.775763
CNH 7.773194
COP 3641.136324
CRC 525.082981
CUC 1.152127
CUP 30.531367
CVE 110.279556
CZK 24.248834
DJF 205.552484
DKK 7.475686
DOP 67.260629
DZD 153.094981
EGP 57.25311
ERN 17.281906
ETB 186.307243
FJD 2.552999
FKP 0.855822
GBP 0.856474
GEL 3.01278
GGP 0.855822
GHS 13.567791
GIP 0.855822
GMD 85.257004
GNF 10136.986094
GTQ 8.807392
GYD 241.487115
HKD 9.038495
HNL 30.937889
HRK 7.53374
HTG 150.917301
HUF 365.417829
IDR 20663.399096
ILS 3.465254
IMP 0.855822
INR 109.88556
IQD 1512.132406
IRR 1584001.909458
ISK 142.401223
JEP 0.855822
JMD 182.968915
JOD 0.81682
JPY 182.476764
KES 149.050765
KGS 100.753239
KHR 4682.906821
KMF 491.958449
KRW 1636.527559
KWD 0.356756
KYD 0.961952
KZT 540.905481
LAK 26081.121706
LBP 103366.035355
LKR 387.731275
LRD 208.352023
LSL 18.827475
LTL 3.401932
LVL 0.69691
LYD 7.358163
MAD 10.769655
MDL 20.084174
MGA 4962.784289
MKD 61.534725
MMK 2418.826093
MNT 4142.864879
MOP 9.326933
MRU 46.275313
MUR 54.081038
MVR 17.811217
MWK 2001.516308
MXN 19.820025
MYR 4.714616
MZN 73.622813
NAD 18.827475
NGN 1572.27322
NIO 42.474869
NOK 10.995958
NPR 175.761776
NZD 1.964521
OMR 0.442988
PAB 1.154277
PEN 3.901717
PGK 5.099806
PHP 70.29585
PKR 320.457643
PLN 4.303828
PYG 6866.085075
QAR 4.21932
RON 5.255425
RSD 117.319946
RUB 95.630302
RWF 1695.667973
SAR 4.324335
SBD 9.295762
SCR 16.728727
SDG 691.847008
SEK 10.966931
SGD 1.477952
SLE 28.338716
SOS 659.704256
SRD 43.627022
STD 23846.704324
STN 24.503872
SVC 10.099596
SZL 18.811973
THB 38.186089
TJS 10.648237
TMT 4.038205
TND 3.385417
TRY 54.945057
TTD 7.815235
TWD 37.132483
TZS 3058.895077
UAH 51.685868
UGX 4299.660833
USD 1.152127
UYU 46.487145
UZS 13756.114236
VES 868.947202
VND 30205.891598
VUV 137.499774
WST 3.144404
XAF 656.06068
XAG 0.018516
XAU 0.000271
XCD 3.113681
XCG 2.080329
XDR 0.815929
XOF 656.06068
XPF 119.331742
YER 272.881349
ZAR 18.850298
ZMK 10370.523502
ZMW 21.960471
ZWL 370.984448
  • RBGPF

    0.0000

    69.74

    0%

  • CMSD

    -0.0600

    21.98

    -0.27%

  • BTI

    -0.5400

    58.73

    -0.92%

  • CMSC

    -0.0100

    21.72

    -0.05%

  • BCE

    0.7100

    22.77

    +3.12%

  • RELX

    -0.8600

    35.75

    -2.41%

  • NGG

    0.1500

    80.41

    +0.19%

  • RIO

    -1.8600

    99.65

    -1.87%

  • GSK

    0.7100

    52.17

    +1.36%

  • RYCEF

    -0.3800

    20.62

    -1.84%

  • VOD

    0.6900

    16

    +4.31%

  • BCC

    -0.5400

    84.26

    -0.64%

  • BP

    1.0200

    42.23

    +2.42%

  • JRI

    -0.0100

    12.66

    -0.08%

  • AZN

    -0.4300

    161.07

    -0.27%

Italy's luxury brands shaken by sweatshop probes
Italy's luxury brands shaken by sweatshop probes / Photo: Gabriel BOUYS - AFP/File

Italy's luxury brands shaken by sweatshop probes

A series of investigations into exploitative work conditions within fashion subcontractors has roiled Italy's luxury industry, with the government decrying attacks on "Made in Italy".

Text size:

Five fashion brands have been put under court administration since 2024 following probes by Milan prosecutors that uncovered worker abuses and a lack of oversight into the supply chains of some of Italy's most respected brands.

Most recently, lawyers for luxury leather company Tod's were due in a Milan court Wednesday, where prosecutors want to impose a temporary advertising ban and outside administrators in light of what they have called "malicious" actions by the company.

The investigations led by prosecutor Paolo Storari have cast a spotlight on the dark underside of the luxury industry.

At issue is the near-ubiquitous practice of brands subcontracting work to suppliers, who in turn contract to others, amid ever-tighter margins and scant oversight of labour conditions.

To date, investigations have targeted Loro Piana, Dior's Italian subsidiary Manufactures Dior, Giorgio Armani Operations and Alviero Martini -- and prosecutors have suggested more probes could come.

Italy's government has gone on the offensive, with Industry Minister Adolfo Urso saying the reputation of Italian brands was "under attack".

It has proposed a certificate for luxury companies to show they are in compliance with current law -- a measure critics have called toothless, in part because it is voluntary and would unduly shield brands from liability.

"We are taking concrete measures to firmly defend Italian fashion, to protect its reputation and the values that have made it synonymous with beauty, quality and authenticity," Urso said in October.

- 'Chain of exploitation' -

Prosecutors last month said Tod's -- whose leather loafers can reach over $1,000 -- and three of its executives had "full awareness" of the exploitation of Chinese subcontractors but failed to set up systems to prevent it.

Tod's allegedly ignored its own audits revealing working hours and wage violations -- with workers paid as little as 2.75 euros per hour -- breaches of safety measures and what prosecutors called "degrading" sleeping areas within the factory.

Under Italian law, companies can be held responsible for offences committed by representatives -- such as approved suppliers -- acting in their interest.

Advocates for fashion industry workers have for decades pointed to widespread abuses in the supply chain.

Suppliers "are at the mercy of big brands that impose commercial conditions, starting with prices that are too low to cover all costs", said Deborah Lucchetti, national coordinator of the Clean Clothes Campaign in Italy.

That, in turn, fuels a system in which first-tier suppliers turn to subcontractors, imposing ever more stringent terms, which leads to labour abuses, most often against migrants.

"It's a chain of exploitation," she told AFP.

Italy's fashion suppliers are predominately small- and medium-sized companies, tens of thousands of whom have shuttered in recent years, according to industry associations, amid a luxury downturn and higher production costs.

Unable to invest, due to lack of guaranteed work from the commissioning brands and hyper-thin margins, the suppliers stay small. When a big order arrives, they turn to subcontractors for quick help, a system that "effectively pushes players in the supply chain to engage in illegal conduct", said Lucchetti.

Prosecutors said both Tod's and Loro Piana could not have been unaware that one of their main suppliers was externalising all its production -- given that the supplier did not have any production equipment, such as sewing machines, in its facility.

The companies targeted thus far have variously responded by cutting ties with the suppliers, condemning their actions, or blaming them for concealing abuses.

- Reputational risk -

Amid the reputational risk, some brands have sought to reassure consumers.

Last week, one of Italy's top luxury brands, Prada, invited journalists to its Scandicci factory outside Florence, showing the step-by-step transformation of supple leather into luxury handbags.

Asked about the investigations, Prada's Chief Marketing Officer Lorenzo Bertelli, who also heads social responsibility, said production had never been an afterthought for the company.

Other fashion executives, Bertelli said, don't view production "as an area of responsibility": "And this has led to many of things you have read in the newspapers."

Prada does not disclose how much of its production is in-house, but says it is the highest in the industry. Prada owns 25 factories, 23 of which are located in Italy.

Bertelli called it a "constant battle" to keep Prada's supply chain clean.

"We must constantly carry out inspections or checks on suppliers, this is the daily work we do."

(F.Schuster--BBZ)