Francesca Biagioli New scandal in the world of luxury fashion. The Milan court has placed Manufactures Dior srl under judicial administration, revealing serious episodes of labor exploitation in the production of some of its bags
The renowned fashion house Dior has landed in hot water following serious allegations of exploiting Chinese workers in the production of its handbags, which are sold at exorbitant prices compared to their production costs.
Judicial administration imposed
As a result, the Milan (Italy) court has placed Manufactures Dior srl, the company responsible for the Italian production of the famous brand, under judicial administration. This decision follows an investigation by the Milan Public Prosecutor’s Office, which uncovered severe, albeit indirect, instances of labor exploitation.
The investigation findings
The investigation, led by prosecutors Paolo Storari and Luisa Baima Bollone and conducted by the Carabinieri’s labor inspectorate in Milan, revealed that Dior, through its subsidiary, outsourced the entire production of part of its 2024 handbag and accessory collection to third-party companies. These companies, in turn, subcontracted the work to Chinese workshops. These workshops, lacking adequate production capabilities, aimed to minimize costs by exploiting irregular and illegal labor.
Disproportionate costs and prices
The disparity between the labor costs and the retail price of the bags is staggering. Dior paid just $57 for the labor to produce a bag, which was then sold in boutiques for a whopping $2,800.
Inhumane working conditions
In the four workshops inspected, located in the provinces of Milan and Monza and Brianza, authorities identified 32 workers, seven of whom were working off the books, and two were illegal immigrants. The working conditions were deplorable: unsanitary work environments, wages below the minimum threshold, exhausting working hours, and serious safety violations, including the lack of health surveillance and proper training.
Legal actions and penalties
Five company owners, all of Chinese origin, were charged with labor exploitation and related offenses. Fines totaling $150,000 and administrative penalties of $74,000 were imposed, and the four companies faced suspension of their operations due to severe safety violations and the use of illegal labor.
Court’s conclusion
Regarding Manufactures Dior srl, the Milan court concluded:
“Manufactures Dior srl failed to verify the true entrepreneurial capabilities of the subcontracting companies to which it entrusted production and did not conduct effective inspections or audits over the years to ascertain the actual working conditions and environments. The company’s organizational and management models have proven to be inadequate.”
Broader implications for the fashion industry
The investigation highlights a troubling trend in the high fashion industry, where outsourcing combined with the pursuit of maximum profit often leads to cost-cutting on labor and employee safety. Companies involved seem unable to prevent and address labor exploitation in their production cycles.
Call for industry reform
Fabio Roia, the President of the Milan Court, emphasized the need to initiate a dialogue within the fashion sector to stop labor exploitation. The goal is to create a protocol with the Milan Prefecture, the labor inspectorate, and industry operators to ensure such incidents do not recur.
Conclusion
This investigation serves as a stark reminder that behind the glittering luxury of major brands, there can be hidden stories of exploitation and injustice that we can no longer ignore or tolerate.
