Loro Piana Placed Under Judicial Oversight Due to Alleged Worker Exploitation

Yahoo

4 days ago

MILAN — A Milan Court has put Loro Piana into a judicial administration procedure concerning alleged worker exploitation in the Italian luxury brand's supply chain.
Loro Piana in a statement on Monday evening said it 'acknowledges the notification received from the Court of Milan's Preventive Measure Section today regarding labor practices by undisclosed and unauthorized subcontractors of one of its suppliers.'The Italian luxury company stated that 'in breach of its legal and contractual obligations, the supplier did not inform Loro Piana of the existence of these subcontractors. Loro Piana was made aware of this situation on May 20, and, as a result, the maison terminated all relations with the concerned supplier in less than 24 hours.' Furthermore, 'Loro Piana firmly condemns any illegal practices and reaffirms its unwavering commitment to upholding human rights and compliance with all applicable regulations throughout its supply chain. Loro Piana is committed to ensuring that all its suppliers comply with the maison's highest quality and ethical standards in line with its Code of Conduct. In this perspective, Loro Piana has been constantly reviewing and will continue to strengthen its control and audit activities.'According to media reports, Loro Piana sells cashmere jackets with a price tag of 3,000 euros, which, through its subcontractors, would allegedly actually cost only 100 euros. The firm denied this claim. 'The reported cost figures are not representative of the amounts paid by Loro Piana to its supplier, nor do they consider the full value of all the elements, including, among others, raw materials and fabrics.'Looking ahead, Loro Piana concluded by stating that it 'expresses its full willingness to cooperate with the relevant authorities on this matter and intends to provide the utmost support for any further investigations.'
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Loro Piana is controlled by the LVMH Moët Hennessy Louis Vuitton and is helmed by chief executive officer Frédéric Arnault, who succeeded Damian Bertrand last month. Bertrand is now chairman of the brand and has moved to become deputy CEO of Louis Vuitton.This is only the latest luxury brand to incur in such a probe. Dior, also part of LVMH, and the Giorgio Armani Group have also been investigated for allegedly using suppliers who subjected workers to poor conditions, including inadequate wages, and potentially misleading consumers about their commitment to ethical standards, labor practices and artisanal production. Both brands have seen the judicial administration procedures lifted after taking steps to improve their supply chain and labor practices.
In February, a Milan court ordered the revocation of the judicial administration imposed since April last year on Giorgio Armani Operations, a unit of the namesake designer's fashion group, over the labor practices of its Chinese-owned subcontractors.
At the time, the Armani Group said in a statement that the decision to revoke the judicial administration was made because the company has taken all the necessary corrective action and 'already had a structured and tested system of controls and protection of its supply chain.' The revocation came ahead of the one-year deadline initially expected, it pointed out.
The statement underscored that the decision was also made because the court recognized the group's craftsmanship as Armani's suppliers 'are often to be identified as highly qualified artisans, especially regarding Italian production, characterized by the highest level of sophistication and quality.'
Last year, judges also placed an Italian subsidiary of Dior, which produced handbags for the French brand, under the same form of special administration, again for lack of control over its supply chain. In May, the French fashion house was cleared of any wrongdoing and said it remains 'committed to upholding our values of transparency and respect throughout our supply chain. This further underscores the maison's steadfast and historic dedication to pursuing both rigorous Made in Italy products and the highest standards of ethics and excellence.'
Alviero Martini was also investigated over alleged worker exploitation, and in May, a unit of Valentino specialized in bags was placed under judicial administration for a year by the Milan court after worker abuse was uncovered at subcontractors.
Following the move, Valentino said it had intensified its supplier evaluation process across its supply chain in recent years and would cooperate with the relevant authorities to 'fully understand the circumstances that have led to the measures taken by the judiciary in this specific case.'
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