LVMH's Loro Piana placed under court administration over worker exploitation
The court said Loro Piana had handed the production of apparel, including jackets, to Evergreen Fashion Group, which is owned by a Chinese company.
'The production of such apparel had been carried out in a context of labour exploitation,' according to the ruling.
Loro Piana has been placed into a one-year court administration to address the shortfalls in its supply chain, the ruling shows. The sanction means a court-appointed administrator will oversee the brand's operations.
The brand is not under criminal investigation and the order will be lifted if the company complies with legal requirements before the 12-month deadline given by the court. Loro Piana declined to comment on the ruling.
Loro Piano is known for its cashmere jumpers which retail for more than €1,000, as well as jeans selling at close to €700.
Loro Piana was bought by LVMH, the world's largest luxury conglomerate, in 2013. Frédéric Arnault, son of LVMH founder Bernard Arnault, was appointed chief executive of the Milan-based fashion house in March.
It is the fifth fashion company to have been placed under court administration over labour issues in Italy in the past 18 months, in a scandal that has tarnished the image of the country's luxury industry.
Milanese prosecutors have been investigating the industry's supply chain for several years after media investigations uncovered multiple cases of labour malpractice across several companies that have Chinese owners based in Lombardy and Tuscany.
Luxury brands subcontracted production to meet heightened demand during the pandemic-era luxury boom.
LVMH's Dior, Italy's Armani and Alviero Martini have had the restrictions placed on them lifted before the 12-month deadline. Valentino, part-owned by France's other luxury conglomerate Kering, was also subjected to a similar order in May.
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