Luxury brands, including Giorgio Armani and Dior, are facing increasing scrutiny over labor conditions in their supply chains. Recent investigations have revealed sweatshop-like conditions for migrant workers in Italy, prompting protests from laborers in Geneva on September 11, 2024. These workers accused Montblanc of terminating contracts with Z Production due to demands for legal working hours, despite Z Production having improved conditions in October 2022. However, the company was found to be employing undocumented migrants, raising serious ethical concerns about labor practices in the luxury fashion industry.
In 2024, a Milan court placed several luxury brands, including Giorgio Armani Operations, into judicial administration due to these labor issues. Investigations uncovered harsh working conditions in 16 workshops located near Milan, highlighting the challenges faced by the industry in ensuring ethical labor practices. Carlo Capasa, a prominent figure in the fashion industry, noted the difficulty of auditing numerous suppliers, which has contributed to the ongoing problems with underpaid labor.
The financial implications of these labor practices are stark; for instance, a contractor for Dior was able to charge €53 per handbag, which is a fraction of the retail price of €2,600. This disparity raises questions about the true cost of luxury goods and the ethical responsibilities of brands like Giorgio Armani and Dior. As the market cap of LVMH exceeds €300 billion, the pressure is mounting for these companies to address labor rights issues and improve conditions for workers within their supply chains. [6389bbf4]