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A Slap on the Wrist Won't Solve Luxury's Sweatshops Problem
A Slap on the Wrist Won't Solve Luxury's Sweatshops Problem

Business of Fashion

time23-05-2025

  • Business
  • Business of Fashion

A Slap on the Wrist Won't Solve Luxury's Sweatshops Problem

For the last year, Dior has been dogged by a sweatshop scandal that has tarnished its image. This week, the luxury giant appeared to finally put it to bed. On Wednesday, Italy's Competition Authority closed an investigation into whether the brand had misled consumers about working conditions in its supply chains without finding any wrongdoing. A Dior manufacturing unit had already been released from court-appointed supervision — imposed to ensure the company tightened up supply-chain oversight processes authorities deemed too lax — in February. The catalyst for the scrutiny was a series of cases brought by prosecutors in Milan, linking luxury labels to local sweatshops. Many of fashion's top brands had turned a blind eye to labour exploitation in order to maximise profits, prosecutors alleged. Dior has painted its involvement in the scandal as the result of isolated glitches in an otherwise robust system of supply-chain controls, but the brand has spent months tightening things up in order to get out from under its shadow. The brand 'developed several best practices' to resolve concerns about its supply-chain oversight practices, the Milan court concluded when it released Dior from external oversight (early) in February. Italy's competition authority dropped its case against the brand after it agreed to update its ethics and social responsibility statements, strengthen its processes for vetting and monitoring suppliers and provide additional training to employees in marketing and communication functions. Dior will also contribute €2 million ($2.3 million) over the next five years to help identify and support victims of labour exploitation. A deftly wielded regulatory stick would appear to have been an effective tool for change. Even brands that have not been caught up in the Milan scandal have tightened their due diligence and outsourcing procedures, insiders say. Problem solved? Not quite. Last week, Milan's court issued a scathing rebuke to Valentino, alleging that the company had done nothing to improve its control systems and continued to work with suppliers that exploited workers, despite the attention drawn to the issues over the last year. The brand must now undergo its own improvement process under the supervision of a court-appointed administrator. Valentino said it has intensified its oversight processes over the last few years and that it would cooperate with authorities to understand the issues. Critics have argued that the consequences suffered by brands caught up in the scandal are too lax, amounting to little more than a bit of public embarrassment. Italian consumer group Codacons called the Competition Authority's decision to close its case against Dior this week without imposing any fine or sanction 'absurd.' In the Tuscan manufacturing hub of Prato, local trade union SUDD Cobas said workers still come to their offices reporting issues of labour exploitation at factories that they say supply luxury labels. To be sure, Italy's highly fragmented network of small suppliers is difficult to police. Over the last 30 years, intensifying competition from fast fashion manufactured in low-cost labour markets has given rise to a cottage industry of illegal manufacturers that cut prices by disregarding labour laws and employing their workers under the table. Many of these factories are run by Chinese migrants who began to arrive in Italy in the '90s, finding opportunity in a textile sector that many young Italians were abandoning for better opportunities elsewhere. Manufacturers and labour advocates say the issues also stem from large brands' sourcing practices, which prioritise speed, price and flexibility over labour concerns, essentially demanding 'Made in Italy' services at 'Made in China' prices. Years of voluntary commitments to ethical practices have done little to address these structural challenges. Without even-handed, consistent regulatory scrutiny and real penalties when supply-chain controls are found lacking, the risk is that bad practice simply moves to areas where oversight is looser. THE NEWS IN BRIEF FASHION, BUSINESS AND THE ECONOMY (Getty Images) Chanel pulled back on price hikes as sales fell 4 percent. The luxury fashion house's annual revenues dropped for the first time in five years, sliding 4.3 percent to $18.7 billion last year. Chanel plans to ease off price hikes and invest in new markets including India, Mexico and Canada. LVMH relinquished its place among Europe's top five biggest stocks. The French conglomerate's shares fell 3 percent on Thursday, marking a 25 percent decline this year. Sources in the company also cautioned that lacklustre consumer confidence, particularly in China, may cause second-quarter sales to show no improvement on the previous one. Ralph Lauren's quarterly results beat estimates on steady demand. The American luxury company surpassed fourth-quarter revenue and profit estimates, but forecast 2025 revenue below estimates due to tariff-related uncertainties. Amer Sports raised its 2025 guidance on strong demand for Arc'teryx and Salomon footwear. The athletic apparel and equipment maker saw shares rise a record 19.05 percent on Tuesday after it announced first-quarter revenue rose 23 percent year on year to $1.47 million. It also raised its outlook, with revenue expected to grow 15 to 17 percent. Levi Strauss will sell Dockers to Authentic Brands Group for $311 million. The denim brand is selling the apparel brand to the owner of brands like Brooks Brothers and Reebok, allowing Levi's to focus on its flagship brand and Beyond Yoga activewear line. Chanel spent $133 million on a Paris building near its flagship store. The building, located at 23 rue Cambon — close to Chanel's flagship boutique at No. 31 — was purchased for €118 million ($133 million) in September, as 'part of the record level of investment made during the year, including in real estate,' a Chanel representative said. Steve Madden sued Adidas to thwart challenges to shoe designs. Steve Madden sued the German sportswear company over its alleged effort to prevent the US footwear company from selling fashion sneakers featuring two non-parallel bands. Target cut its 2025 sales forecast on shopper pullback and tariff hits. The retailer reported first-quarter comparable sales dropped 3.8 percent, and now expects net sales to decline by a low single digit this year, down from previous guidance for an increase of about 1 percent, citing the effect of tariffs, boycotts and dwindling consumer confidence. VF is rushing US imports to beat tariffs, its outlook miss sank shares. VF Corp.'s shares fell 14 percent on Wednesday after forecasting a larger-than-expected loss and reporting it's been rushing products to the US to beat the 90-day window of tariff pauses. It reported a quarterly operating loss of as much as $125 million, while analysts had expected a loss of $73.1 million. Luxury retailer Canada Goose withheld its annual forecast on tariff uncertainty. The parka maker withheld from providing its fiscal 2026 forecast, citing the unpredictability of tariffs. The Toronto-based luxury retailer reported strong quarterly sales, causing US-listed shares to shoot up 13 percent in premarket trading. Hoka, Uggs owner Deckers declined to provide a fiscal outlook due to tariff uncertainty. Though the California-based company's first-quarter revenue rose 6.5 percent year on year to $1.02 billion, beating analyst expectations, shares plummeted after Deckers scrapped its annual forecast. Urban Outfitters beat analyst expectations off strong sales growth. The Anthropologie- and Free People-owner beat first-quarter sales and profit expectations in its second straight quarter of strong revenue gains. Sales rose 10.7 percent to $1.33 billion and earnings per share soared 78.5 percent to $1.16, surpassing analysts' expectations by 40 percent. TJ Maxx's parent company beat sales estimates as tariff uncertainty loomed large. Resilient consumer demand for off-price goods caused TJX Cos to beat quarterly sales expectations and maintain annual forecasts. Off-price retailers like TJ Maxx are expected to sidestep China tariffs, due to their expansive sourcing strategies. UK's JD Sports fell on lower sales, US tariffs warning. The British sportswear retailer posted a 2 percent fall in first-quarter sales and warned that President Trump's tariffs could affect customer demand, driving shares down 6 percent. Swatch was targeted by an activist investor. Steven Wood, founder of US firm GreenWood investors, tried and failed to secure a place on the Swiss watchmaker's board, as he faced the Hayek family, which controls 44 percent of Swatch voting rights. Adidas, Puma and Nike all set to raise prices. Some Nike footwear will reportedly see price hikes between $5 and $10, while apparel will increase in price by $2 to $10, while Vietnam, a manufacturing hub for both German sportswear brands, faces the impending return of a steep 46 percent tariff. Victoria's Secret adopted a poison pill to thwart investor BBRC. After BBRC increased its position to 13 percent of outstanding shares, the undergarments, sleepwear and beauty brand announced a shareholders rights plan to issue one right for each share at the close of business on May 29 which will be triggered if an investor acquires 15 percent of outstanding common stock, in order to prevent a takeover. THE BUSINESS OF BEAUTY (Courtesy) Hailey Bieber's Rhode launched in Sephora. The beauty retailer confirmed the minimalist skincare brand will expand into brick-and-mortar locations. Revolution Beauty put itself up for sale. The British cosmetics and skincare retailer is exploring a sale after receiving a preliminary takeover approach from an undisclosed potential bidder. Estée Lauder Companies, Shiseido and L'Oréal suffered as spending on duty-free goods in China continued to fall. Beijing's crackdown on resellers taking advantage of duty-free shopping, or 'daigou' in Chinese, has also stunted Hainan's economy. In 2022, the province targeted 100 billion yuan of duty-free sales, but in its most recent 2025 report, the goal sank to 52 billion yuan. PEOPLE (David Sims) Balenciaga named Pierpaolo Piccioli creative director. Kering named the Italian designer — who spent 25 years at Valentino — as Demna's successor at the luxury fashion house, effective July 10. Best known for his bold use of colour and sculptural haute couture, Piccioli's appointment seems to signal an aesthetic and commercial reset for Balenciaga. Bath & Body Works appointed former Nike executive Daniel Heaf as CEO. Heaf, whose previous role as chief strategy and transformation officer of Nike was eliminated in March, began his tenure as the body care brand's chief executive immediately following Monday's announcement, replacing Gina Boswell. Felix Capital appointed Laurent Droin as partner. The Goop, Anine Bing and Ami Paris investor named Droin a partner in its first such appointment in four years. Previously, Droin was a partner at Eurazeo where he led investments in Gisou, Axel Arrigato and Ex Nihilo. Cascale CEO Colin Browne stepped down after a year in the role. The sustainability-focussed trade group is searching for a successor after announcing Browne will step down on July 31. Board chair Tamar Hoek said Browne had overseen a reset that stabilised and refocussed the initiative over the last year. MEDIA AND TECHNOLOGY Apple announced plans to release smart glasses in 2026 as part of its AI push. Company engineers are accelerating work on the smart glasses in order to meet the tech giant's late 2026 release goal. The iPhone maker's current AI offerings have lagged behind competitors' technology. Compiled by Jessica Kwon.

Estonia's entry, ‘Espresso Macchiato,' brewed trouble in Italy.
Estonia's entry, ‘Espresso Macchiato,' brewed trouble in Italy.

New York Times

time17-05-2025

  • Entertainment
  • New York Times

Estonia's entry, ‘Espresso Macchiato,' brewed trouble in Italy.

When Tommy Cash, a rapper and singer from Estonia, won his country's Eurovision selection with 'Espresso Macchiato,' he barely had time to celebrate before a backlash began. In the song, Cash sings in a cheesy Italian accent that he is 'sweating like a Mafioso' from working so hard, and just wants a coffee. 'Me like mi coffee,' he says: 'Very importante.' Cash's riff on Italian clichés did not go down well in some parts of Italy. Gian Marco Centinaio, a lawmaker with Italy's far-right League Party, posted on Instagram that Eurovision should ban the song. 'Is this the idea of ​​European brotherhood that the organizers of the Eurovision Song Contest have in mind?' he wrote. The flap also made headlines because Codacons, an Italian consumer rights organization, complained that the song 'conveys a message of a population tied to organized crime.' In a recent interview, Cash said that he found the reaction over the top. He hadn't meant to insult Italians, he said: 'I love Italy. I love the people. I'm drawn to them because they're so passionate.' In earlier songs, he rapped in English with his own heavy Eastern European accent, he said, and he also made a track with a German-accented chorus. His comedic Italian voice in 'Espresso Macchiato' was no different than those, he said. Cash — who has made several tracks with Charli XCX — has many fans in Europe who love his left-field vibe and provocative videos, but he's never been close to a household name. But in Italy, at least, he is now a star. Cash said that he had performed on Italian TV many times since 'Espresso Macchiato' blew up. On a recent trip to Milan, he added, fans chased him down the street. He had a simple message for anyone who still felt insulted. 'Drink a coffee,' he said: 'Chill!'

How much does a conclave cost? The Vatican remains discreet
How much does a conclave cost? The Vatican remains discreet

L'Orient-Le Jour

time08-05-2025

  • Politics
  • L'Orient-Le Jour

How much does a conclave cost? The Vatican remains discreet

Thousands of people are expected at St. Peter's Square starting Wednesday to witness the election of Pope Francis' successor. The Vatican is responsible for organizing the ceremony at its own expense, on which it remains discreet, while the Italian state, since the Lateran Treaty of 1929, covers part of the costs related to security. In 2005, the death of Pope John Paul II and the election of his successor, Benedict XVI, cost the Vatican 7 million euros, according to the financial report published by the Holy See. However, from year to year, the Vatican shows varying degrees of transparency regarding its accounts, whose deficit continues to worsen. Thus, after Benedict XVI's historic resignation in 2013, the Holy See did not detail the cost of the conclave that resulted in Francis's election. It simply reported a deficit of 24 million euros that year. 11,900 security personnel But Rome's mayor at the time, Gianni Alemanno, requested the state to aid the municipality and estimated the costs at 4.5 million euros for reinforced public transport, increased expenses for municipal agents and especially the costs related to the security of visitors, whether in the city of Rome or within the Vatican, which is independent. Since the Lateran Treaty signed in 1929 by the Vatican and Italy, then led by fascist dictator Benito Mussolini, it is the responsibility of the Italian police, alongside the Vatican gendarmerie, to ensure security around the Vatican and in St. Peter's Square, where the name of Francis's successor will be announced at the conclave's conclusion. This time, the ultraconservative government of Giorgia Meloni has already taken steps: It signed, the day after Francis' death on April 21, a decree releasing funds to mobilize Italian civil protection, responsible for "mobility, assistance and hospitality," especially for foreign delegations, "until the election of the new sovereign pontiff [pope]," alongside the Italian police under the authority of the prefect of Rome. The total cost for the Italian state has not yet been "estimated," as civil protection minister Nello Musumeci indicated at the end of April, "but a measure has already been adopted for the first five million euros." The government recalled that in 2005, 11,900 security agents, 1,000 firefighters and 5,000 officials worked during the funerals and then the conclave. But alongside these costs, the city of Rome and its merchants can expect positive returns: According to the consumer protection association Codacons, "prices in Rome" for hotels and accommodations reached "stratospheric levels" during Francis's funerals, ranging from 200 to 2,000 euros per room near the Vatican, compared to 170 to 780 under normal conditions during this already highly touristic period. Chronic deficit The Holy See did not want to comment on the costs of the conclave opening Wednesday, with its spokesperson Matteo Bruni simply reminding that there will be no "sponsor" advertising. The chamberlain cardinal, American Kevin Farrell, responsible for current affairs since Francis's death, "takes care of everything," he added. Among other things, it is necessary to bring cardinals and their assistants from around the world, accommodate them, feed them, provide laundry services, set up the Sistine Chapel for the conclave or St. Peter's Square for the funerals and then the proclamation of the new pope. However, the finances of the Holy See are already precarious: Although the Vatican reports its accounts with much irregularity, it mentioned a deficit for the Roman Curia (central government) of about 30 million euros in 2022, for 769 million euros in revenue. Keen to bring order to Vatican finances and fight against fraud, Pope Francis created the powerful Secretariat for the Economy in 2014. In 2022, its prefect, Spanish priest Juan Antonio Guerrero, explained that it undertakes to sell "20-25 million euros" of the immense Vatican estate each year. However, the micro-state continues to suffer from a decrease in donations from the faithful and inconsistent financial investments, while its operating expenses, particularly personnel costs, increase. Its image has also been tarnished by embezzlement scandals, notably involving the influential Cardinal Becciu, who is prohibited from voting in the conclave opening Wednesday.

Italy court allows class action against Stellantis over faulty airbags
Italy court allows class action against Stellantis over faulty airbags

Reuters

time14-04-2025

  • Automotive
  • Reuters

Italy court allows class action against Stellantis over faulty airbags

MILAN, April 14 (Reuters) - A civil court in Turin, Italy, has ruled admissible a class action suit against Stellantis ( opens new tab concerning potentially faulty airbags made by Japanese automotive parts company Takata, Stellantis and two consumer groups behind the legal action said on Monday. Affected vehicle owners have 150 days to join the class action, the two consumer groups Codacons and Altroconsumo said in two separate statements. They added that a court hearing on the case had been adjourned to November 21. here. Similar legal actions against Stellantis have already been launched in France. Stellantis took note of the court's decision, saying in a statement it was working "tirelessly" on its recall campaign and was reserving "the right to consider any appropriate initiative in the context of the ongoing proceedings." It noted that the decision "concerns only the admissibility of the class action, and neither the alleged liability of (Stellantis) nor the damages claimed, the assessment of which is postponed to a later stage of the proceedings." The Codacons association, which filed the class action request on behalf of other consumer groups as well, said requested compensation could amount to up to 285 million euros ($323 million). Stellantis launched last year a vast "Stop Drive" recall campaign for Takata airbags affecting hundreds of thousands of Citroen and DS models made between 2009 and 2019 and located in 24 different countries in Southern Europe, Africa and the Middle East. These airbags can cause serious injuries or death because the chemicals they contain can deteriorate in hot and humid weather conditions, causing them to deploy with too much force, according to the company's recall statement. Takata Group filed for bankruptcy in 2017. Stellantis was created in early 2021 through the merger of France's Peugeot and Citroen maker PSA and Italian-American group Fiat Chrysler. Its other brands include Jeep and Alfa Romeo. ($1 = 0.8817 euros) Reporting by Giulio Piovaccari, editing by Alvise Armellini and Aurora Ellis

Inside Italy: The rise of vintage tourist trains and will Rome's transport ever improve?
Inside Italy: The rise of vintage tourist trains and will Rome's transport ever improve?

Local Italy

time08-03-2025

  • Local Italy

Inside Italy: The rise of vintage tourist trains and will Rome's transport ever improve?

Inside Italy is our weekly look at some of the news, talking points and gossip from Italy that you might not have heard about. It's published each Saturday and members can receive it directly to their inbox, by going to their newsletter preferences or adding their email to the sign-up box in this article. Public transport in Rome is often the target of criticism, with both locals and tourists complaining about delays, overcrowding and overall unreliability. The problem is anything but new. In 2019, research by travel planner app Moovit found that public transport passengers in the city waited an average of 20 minutes for a bus, metro, tram or train to turn up. This made the Roman transport network the slowest of any European capital surveyed, and placed it well behind other major Italian cities, including Venice (10 minutes), Milan (11 minutes), Genoa (12 minutes) and Florence (14 minutes). The capital's metro system has also long been ranked among the smallest in Europe, as it operates only three lines (Metro A, B and C), with a total extension of around 60 kilometres (just over 37 miles). For context, Spain's capital, Madrid, counts 12 lines, stretching for a total of 293 kilometres. Finally, Rome's public transport has made international headlines on multiple occasions in recent years after several buses caught fire due to poor maintenance or mechanical failure. Luckily, the phenomenon, dubbed by locals 'flambus', has not resulted in any serious injuries or casualties so far. Safety concerns, delays and inefficiency have all led to transport operator Atac facing harsh criticism over the past few years. But the operator has come under additional pressure in recent weeks after it was hit by a formal investigation over subpar service by Italy's competition authority AGCM. AGCM said last week that the investigation was linked to allegations that Atac 'systematically failed to meet objectives' related to punctuality, safety measures and the functioning of elevators, escalators and moving walkways between 2021 and 2023. The authority added that the operator's alleged failure to comply with the quality standards set out in its contract with the city of Rome may amount to 'unfair commercial practices' if proven. Consumer group Codacons has expressed satisfaction over AGCM's decision to launch an investigation into Atac, saying that it validated 'the many complaints filed over the years [...] over poor public transport services in the capital". Codacons President Massimiliano Dona also demanded that Atac temporarily reduce fares 'as a form of compensation to consumers" pending the conclusion of the investigation. Though any fare reduction seems to be very unlikely at this point (especially as the outcome of the investigation is still months, if not years, away), I think that the recent investigation is an incredibly important signal for public transport passengers in Rome. Italy's competition authority, which is also tasked with protecting consumers' rights, seems to have (at last) chosen to act on passengers' complaints, putting the screws on an operator that's been falling short of standards for a very long time. Will Atac respond to the investigation by making serious adjustments to their business and ultimately improving services for customers? Only time will tell. What's certain at this point is that Rome deserves a public transport network and infrastructure that is worthy of its beauty. Why are Italy's treni storici so popular? Though some passengers may have not-too-distant memories of run-down trains trundling through the Italian countryside, national rail services have improved significantly in the past two decades and journeys are becoming faster and more comfortable. But rail travel is not just an increasingly popular alternative to air travel for long-distance journeys; it's also currently playing a far bigger role in Italy's tourism industry than it ever did before. In 2023, Italian state-owned railway company Ferrovie dello Stato (FS) launched a number of new tourist-focused services known as Treni Turistici Italiani under plans to encourage people to travel beyond Italy's major cities and best-known destinations and support local economies in lesser-visited areas. As part of the initiative, Ferrovie dello Stato also started to bring old trains dating as far back as the 1930s out of retirement, deploying them on designated scenic routes that offer travellers unique views of the Italian paesaggio. What started out as a fairly limited venture offering only a handful of train journeys across the country now counts dozens of routes weaving their way through some of the most magnificent parts of the peninsula. Among the most popular services are Abruzzo's Ferrovia dei Parchi, which takes passengers from Sulmona to Roccaraso and Castel Di Sangro on 1930s Centoporte carriages, and the Treno Natura, which takes travellers from Siena to small towns in Tuscany's countryside, including San Giovanni D'Asso, Castiglione d'Orcia and Asciano. Other sought-after services include the Sebino express, which connects Milan and Brescia with a number of small towns in rural Lombardy, and the Reggia Express, which runs between Naples and Caserta. But what's behind the popularity of these treni storici ('historical trains')? The aura of nostalgia and romanticism associated with travelling aboard vintage trains with beautifully restored carriages, wooden interiors and classic designs cannot be overstated. And the breathtaking landscapes some of these services glide through are an irresistible attraction for hundreds of travellers. But it should also be noted travel on treni storici is heavily subsidised by local and regional governments. This means that round-trip tickets are often only slightly more expensive than tickets for 'ordinary' regional train journeys operated by Trenitalia. For instance, a one-way ticket on the Reggia Express only costs €4.90 for adults (and €2.45 for children aged 4 to 11).

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