LVMH's Loro Piana put under court administration in Italy over labour exploitation
Loro Piana Spa is the fifth fashion company to be targeted by the same Milan court for similar labour issues since 2023, according to the 26-page ruling reviewed by Reuters on Monday.
Units of fashion brands Valentino, LVMH's Dior, Italy's Armani, and Italian handbag company Alviero Martini were also placed under administration.
The court found that Loro Piana, which makes cashmere clothing, subcontracted its production through two front firms with no actual manufacturing capacity to Chinese-owned workshops in Italy that it said exploited workers.
The Milan court found Loro Piana 'culpably failed' to adequately oversee its suppliers in order to pursue higher profits, according to the ruling.
The court in its ruling also appointed an external administrator to verify the company meets all the judges' demands on control of its supply chain.
Loro Piana declined to comment. LVMH was not immediately available for comment.
The administration will be lifted earlier if the unit brings its practices into line with legal requirements, as was the case with Dior, Armani and Alviero Martini previously targeted by the court.
LVMH, the world's biggest luxury group, acquired 80% of Loro Piana in July 2013, leaving 20% in the hands of the Italian family that founded the company.
Italian fashion firms violate rules
In their ruling, the Milan judges wrote that despite the previous cases being widely reported 'this production chain, headed by Loro Piana, has continued to operate until now'.
In its ruling, the court also emphasises that this kept going even after representatives of Italy's fashion brands signed an accord in May with legal and political authorities to fight worker exploitation.
The owners of the contracting and subcontracting companies are under investigation by Milan prosecutors for exploiting workers and employing people off the books. Loro Piana Spa itself faces no criminal probe.
The prosecutors in the case said the violation of rules among fashion companies in Italy was 'a generalised and consolidated manufacturing method'.
Italy is home to thousands of small manufacturers that make up 50%-55% of global luxury goods production, consultancy Bain has calculated.
Worker beaten after asking for backpay
The case involving Loro Piana Spa originated after Carabinieri police from the Milan labour protection unit in May arrested a Chinese workshop owner and closed his factory in the northwestern suburbs of Milan.
The employer was reported by one of his workers for beating him, causing injuries that required 45 days of treatment, after the worker demanded 10,000 euros ($11,692.00) in unpaid wages.
Carabinieri police found that the workshop produced Loro Piana-branded cashmere jackets and that its 10 Chinese labourers, including five illegal immigrants, were forced to work up to 90 hours a week, seven days a week, were paid 4 euros an hour, and slept in rooms illegally set up inside the factory.
Carabinieri said in a statement they inspected two intermediary companies and three Chinese workshops, all in the Milan area, and identified 21 workers, 10 of whom were working off the books without proper registration, including seven illegal immigrants.
According to the court ruling, the owner of an intermediary company stated that in recent years she had been producing around 6,000-7,000 jackets per year for Loro Piana at an agreed price of 118 euros per jacket if the order was for more than 100 items and 128 euros if the order was under 100 items.
Based on the Loro Piana website, for example, men's cashmere jackets range from a minimum of over 3,000 euros to a maximum of over 5,000 euros.
In their statement, Carabinieri concluded they had closed two Chinese-owned factories, the third being a 'paper' company with no production capacity, and imposed a joint fine of over 240,000 euros.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
36 minutes ago
- Express Tribune
Russia rolls a geopolitical dice
Listen to article Pakistan presented its first National Security Policy (NSP) in January 2022. The policy emphasised a shift to economic security and a citizen-centric approach. Former National Security Advisor Moeed Yousaf led the idea of recognising that economic security was crucial for overall national security. Seen in the context of Pakistan's foreign policy towards Afghanistan, it is hard to understand how geo-economics can precede geopolitics. Pakistan provides Afghanistan its primary transit route, serves as its largest export market and acts as its principal diplomatic emissary to the world. It's not just geo-economics but geopolitics that binds both countries in a not-so-friendly but enduring relationship. In the matter of Afghanistan, a recent geopolitical event is dominating the current discourse on Afghanistan. Russia has recently rolled a geopolitical dice that may have far-reaching regional and global implications. By according diplomatic recognition to the Taliban regime, the first by any country, the Russian dice puts on spot the very idea of international consensus led by the US not to do so. It is not just Russia but China also that is supporting the idea of developing a regional consensus in treating the Taliban not just as a military movement or a rogue regime but as a responsible political force that can be trusted with the process of state-building. Countries in the Russian and Chinese sphere of influence must already have sensed the bigger picture behind the Russian idea of the roll of this dice. With one roll of the dice, Russia has indicated that it is ready to forego all the historical animosity and grievances that have overshadowed its relationship with Afghanistan. When the Soviet Union invaded Afghanistan in 1979, a million Afghans were killed, a million and a half were wounded, three million sought refuge in Iran and Pakistan, and an unknown number were internally displaced — all out of a population of fewer than 20 million people. Yet both Russia and Afghanistan have decided to move beyond their historical grievances, and Russia, by recognising the Taliban's government, has laid the foundation for helping the Taliban in transitioning from a military movement to becoming an internationally recognised legitimate political force. The dice roller in this case would not do that without a specific agenda. What can be on that agenda? Russia and China, together, are throwing up a challenge to the US-led international consensus against diplomatic normalisation with the Taliban regime. The diplomatic engagement and support that both Russia and China have chosen to offer to Afghanistan stems from the rising tensions between the global north and global south and backs these two great powers' driven narrative of 'the rise of the rest against the west'. On the question of Afghanistan, China is utilising geopolitics to create the right conditions to enable its geo-economic strategies. In January 2025, Chinese President Xi Jinping accepted the credentials of the Taliban's newly appointed Afghan ambassador to China. The message that China sent to the world was clear: China does not believe that Afghanistan should be excluded from the international community. Geo-economically, China doesn't want uncertainty in Afghanistan to upset its plans for Central and South Asia, and it would do everything to politically and diplomatically engage with the Taliban to ensure that the insecurity radiating out of Afghanistan does not undermine its billions of dollars of investment in its neighbouring country, Pakistan. An Afghanistan, supported politically and engaged diplomatically, will ensure that China's largest BRI project, the China-Pakistan Economic Corridor, which runs through areas near the Afghan border, is not vulnerable to strikes from Pakistani Taliban rebels. If China also recognises the Taliban government, would a broader wave of recognition follow? The diplomatic engagement and support that both Russia and China have chosen to offer to Afghanistan stems from the rising tensions with the US, which has made the possibility of normalisation of its relations with the current Taliban regime explicitly conditional. America's Afghan policy is driven by ensuring a global endorsement that the world will stay united in holding the Taliban to their commitments in key areas. Three key areas that the US wants the Taliban to deliver in are: not allowing Afghan land to be used for terrorist activities abroad and giving up violence as an instrument of power; respecting human rights; and undoing its policy of depriving women of their rights. In contrast, the diplomatic olive branch that both Russia and China have offered to the Taliban regime goes against the US-driven international commitment. Seen from the perspective of increased disengagement of the US and Western powers from Afghanistan, the Russian roll of this geopolitical dice may induce a domino effect of more and more countries joining hands with Russia and China in elevating the Taliban's status from being considered as a rogue regime to being accepted as a responsible political force. Geo-economically, Russia is planning to raise the bar of its bilateral trade with Afghanistan from the current $1 billion annual to $3 billion by the end of this year. Afghanistan acts as an important transit corridor for Russia. If Afghanistan gets its act together, it can play a significant role in enabling regional connectivity and providing access to Russian oil and wheat to the South Asian markets. In April this year, Russia, Uzbekistan and Afghanistan have already signed agreements to launch the Trans-Afghan Railway, reaffirming the strategic importance of Afghanistan in regional connectivity. Russia's actions may fundamentally reshape the global community's stance on Afghanistan. President Trump's idea of rolling a tariff dice is already being viewed with contempt by many countries in the world. India has also been put on the spot as its exports have been subjected to a 25% tariff, and the seven Indian companies that imported oil from Russia have been put under sanctions. Will this encourage India to distance itself from American relations? It is already a defence and strategic partner of Russia; will it bring a shift in its relations with China? Pakistan's current government enjoys good relations with the current American administration, and considering that Pakistan is also part of the international consensus against the Taliban regime, what will be the response of Pakistan's establishment to this Russian roll of geopolitical dice? We will have to wait and see.
Express Tribune
5 hours ago
- Express Tribune
Pakistan, China reaffirm resolve to deepen bilateral ties
Listen to article Pakistan and China on Saturday reaffirmed their commitment to deepening bilateral relations and expanding cooperation across various sectors, amid growing regional and global challenges. The reaffirmation came during a meeting between Planning Minister Ahsan Iqbal and Chinese Vice Foreign Minister Sun Weidong in Beijing, where both sides discussed matters of mutual interest, with a particular focus on the second phase of the China-Pakistan Economic Corridor (CPEC). Iqbal praised Beijing's consistent support for Pakistan, especially during recent tensions with India, and commended China's leadership for its role in promoting global peace. He also described the Pakistan-China friendship as growing stronger 'with every passing day' and termed China's development model an inspiration for Pakistan. Also Read: Iranian president reaches Islamabad after paying tribute at Iqbal mausoleum Vice Foreign Minister Sun reiterated China's strong commitment to enhancing cooperation with Islamabad and expressed satisfaction with progress made under CPEC. He reaffirmed Beijing's intent to further strengthen strategic ties and deepen collaboration in political, economic, and regional affairs. The meeting underscored the long-standing partnership between the two countries, often described as 'all-weather' and 'ironclad,' and came days after a high-level interaction between the leadership of both nations. Last month, Chief of Army Staff Gen Syed Asim Munir met Chinese Foreign Minister Wang Yi during his visit to Beijing. The Chinese foreign minister had emphasized that Pakistan remains a diplomatic priority for China and reiterated support for Pakistan's efforts to combat all forms of terrorism. Wang expressed confidence in the Pakistani military's ability to ensure the safety and security of Chinese personnel, projects, and institutions across the country. He also reaffirmed China's readiness to work closely with Pakistan to implement the strategic consensus reached by the leadership of both sides and jointly promote regional peace and stability.
Business Recorder
8 hours ago
- Business Recorder
PSM's cumulative loss reaches Rs600bn, it pays Rs20bn annual interest: chairman
Pakistan Steel Mills (PSM) Chairman Asad Islam Mahni on Saturday said the steel mill's cumulative loss had reached Rs600 billion till 2024, while it paid Rs20bn annual interest. This the PSM chairman told Senate Standing Committee on Industries and Production, headed by Senator Aon Abbas, during its visit to the PSM in Karachi. The committee reviewed the organisation's existing challenges of debts, delayed payments and expenditure, and also heard concerns of employees unions. The committee members also included Senator Syed Masroor Ahsan, Senator Khalida Ateeb, and Senator Husna Bano. During the briefing, Mahni also told the committee that that PSM owed Rs89 billions to the National Bank of Pakistan (NBP) as most of the loan was being provided by the NBP for expenditure including salaries of the company's 934 current employees. Moreover, the committee was informed by PSM officials that two plans were being simultaneously considered by government, one of them was to seek revival of the PSM through Russian Industrial Engineering LLC which will use arch furnace and blast furnace to revive the mill while the other plan seeks to liquidate the PSM after hiring the evaluating firm. Senate panel told: PSM sell-off halted after 3 Chinese cos withdrew EoIs The committee also met with the worker union representatives, who apprised the committee about the hardships of retrenched and current employees of the PSM. The committee formed a sub committee to review the reservations of the employees and held talks with management for their grievances. The Senate standing committee appreciated the efforts of current management to reduce the expenditure of the PSM. However, the committee showed displeasure over frequent thefts in the PSM and directed the authorities to evaluate the losses due to theft. Moreover, it also suggested speeding up the process of liquidating moveable assets being no longer in working condition or have aged their life. The committee was told about arbitrary allotment of PSM land by the Sindh government in past few years, the committee expressed reservations on allotment of PSM's undisputed and entitled land of 1370 acres and 400 acres to the Goths by the Sindh government and desired that such allotment cases should be referred to the Council of Common Interests (CCI). The committee also toured different plants of the PSM and suggested that government should speed up the fate of steel mills.
