Armani faces $4m fine over unfair commercial practices
Reuters
Italy's antitrust regulator has fined fashion group Giorgio Armani and one of its subsidiaries €3.5 million ($4 million) for unfair commercial practices, it announced on Friday.
The Giorgio Armani group has rejected the accusation and confirmed it will appeal the ruling.
According to the regulator, the two companies 'issued misleading ethical and social responsibility statements in contrast with the actual working conditions found at suppliers and subcontractors.'
The authority noted that Armani outsourced most of its bag and leather accessory production to third-party manufacturers. These external suppliers, in turn, subcontracted to other producers — some of which employed workers illegally and failed to meet health and safety standards.
The watchdog said that while Armani promoted sustainability as part of its marketing strategy, those claims did not reflect conditions within parts of its extended supply chain.
The case first surfaced last year when Italian prosecutors placed one of Armani's units under judicial administration — a measure that was later lifted in February.
In an official statement, the Giorgio Armani group said it expressed 'disappointment and bitterness' at the regulator's decision and intends to appeal the ruling before an Italian regional administrative court.
'[The group] has always operated with the utmost fairness and transparency toward consumers, the market, and stakeholders, as demonstrated by the group's history,' the company said.
Last year, Italy's competition authority launched a similar investigation into LVMH -owned Dior to examine whether the French fashion house had misled consumers. Dior reached a settlement in May, agreeing to several remedies that the regulator deemed sufficient to avoid sanctions.
Earlier this year, Italian authorities also placed cashmere specialist Loro Piana and a unit of luxury brand Valentino under judicial administration due to labor abuses uncovered in their supply chains.
($1 = €0.8753)
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