LVMH-Owned Loro Piana Under Italian Court Administration Due to Supplier Exploitation Claims

Image courtesy: red app

Another supplier headache for a LVMH-owned brand. This time, quiet luxury purveyor Loro Piana is facing findings of worker abuse within its cashmere goods supply chain.

Reuters reports that the Italian court hearing the claims found that the brand “culpably failed” to adequately oversee the actions of its contractors and subcontractors as it strived for higher profits. Loro Piana cashmere pieces typically retail for thousands of dollars, while the court found evidence that workers were paid low wages.

Image courtesy: red app

The case began after police from the Milan labor protection unit arrested a Chinese workshop owner and closed the factory over a worker’s claims that he had been beaten. The worker lost 45 days of work due to his injuries and sought back pay and compensation. Police found that the 10 workers, including five illegal immigrants, were compelled to work 90-hour weeks for compensation of €4 per hour, sleeping illegally in the factory. Further investigations into intermediary companies and Chinese workshops discovered additional violations.

Previously, sister brand Dior was under a one-year court administration for labor exploitation in the fabrication of handbags. It was terminated earlier this year. However, Dior took a reputational hit as fashionistas learning that popular Dior multi-thousand-dollar handbags cost merely $57 to produce.