Latest news with #GAOperations
Yahoo
4 days ago
- Business
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Giorgio Armani fined $4m for misleading trade practices
The Italian Competition Authority has fined fashion giants Giorgio Armani and its unit GA Operations €3.5m ($4m) for engaging in deceptive commercial practices. The sanction follows the authority's investigation into the companies' claims about their ethical and social responsibility, which it found to be inconsistent with the actual conditions at their suppliers and subcontractors where the majority of Armani-branded leather bags and accessories production was outsourced. The companies were found to have made false statements from 22 April 2022 to 18 February 2025 regarding their commitment to ethical standards and social responsibility. These claims were deemed unclear, unspecific, inaccurate and ambiguous by the authority, violating consumer protection laws under the Consumer Code. The authority's investigation revealed that Giorgio Armani and its unit promoted their dedication to sustainability and social responsibility, particularly concerning worker safety, as a key aspect of their marketing strategy to align with increasing consumer expectations. This approach was evident in the title of their corporate website, Armani Values, and in documents procured during inspections. The companies outsourced a significant portion of the production of their leather bags and accessories to suppliers who subcontracted the work. Investigations at several subcontractor sites revealed that safety devices had been removed from machinery to boost production, endangering workers' health and safety. These sites were marred by poor sanitary conditions, and there were instances of workers being employed off the books or under informal arrangements. The severity of the situation was underscored by an incident in which a GA Operations employee responsible for quality control admitted to regularly visiting one such subcontractor's facility during an inspection conducted by the Judicial Police. This admission suggested company awareness of the substandard conditions faced by workers producing Armani-branded products. An internal document from Giorgio Armani dated 2024, which surfaced before the commencement of judicial administration proceedings initiated by the Public Prosecutor's Office of Milan, acknowledged that 'in the best of the situations observed, the working environment is at the limit of acceptability; in other cases, there are serious concerns regarding its adequacy and health standards'. In June 2024, the Court of Justice in Milan suggested a nationwide initiative for luxury brands to enhance their oversight of suppliers. The aim is to guarantee compliance with labour laws throughout their supply chains. "Giorgio Armani fined $4m for misleading trade practices" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
6 days ago
- Business
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Giorgio Armani Pushes Back at Italian Competition Authority's 3.5M-euro Sanction
MILAN – The Giorgio Armani company is pushing back on the decision of the AGCM, the Italian Competition Authority, to fine the luxury brand for alleged misleading advertising. The authority is imposing sanctions of 3.5 million euros on Giorgio Armani SpA and G.A. Operations SpA for deceptive business practice linked with the companies' sustainability statements on their Armani Values and websites, which the AGCM claims are contradicted by the uncovered evidence of negligence in supply chain auditing. More from WWD The World's First Giorgio Armani-branded Beach Villas Are Coming to U.A.E. Italy's Wood Supply Chain Urges Swift Trade Deal With South American Trade Bloc Giorgio Armani Heads to Shelter Island for Mare 2025 Party The Italian brand said it will appeal the decision before the Regional Administrative Court. Proceedings were initiated by the AGCM in July last year, three months after G.A. Operations SpA, the manufacturing arm of the Giorgio Armani Group, had been put into judicial administration by a Milan court for alleged negligence in auditing its suppliers whose subcontractors allegedly engaged in sweatshop schemes and workforce exploitation. The probe was fully resolved and the judicial administration procedure lifted last February. In Friday's ruling for sanctions, the Italian Competition Authority said that the 'investigation revealed that the companies placed strong emphasis on their commitment to sustainability — particularly social responsibility, including worker welfare and safety — which has become a marketing tool used to meet growing consumer expectations. This is evidenced, among other things, by the very name of the company website ('Armani Values') as well as by certain documents collected during inspections. 'These clearly show the objective of 'enhancing the brand's positive perception in terms of sustainability … and, from a commercial standpoint … encouraging customers to make purchasing decisions that also reflect the 'values' conveyed through our products',' the authority wrote. In a responding statement issued Friday, Giorgio Armani SpA expressed 'disappointment and bitterness' at the decision of the Italian Competition Authority to conclude the proceedings initiated in July 2024 for alleged misleading advertising, resulting in sanctions against the companies. 'This decision disregards the decree by which the Court of Milan revoked, early, the judicial administration of G.A. Operations SpA, acknowledging that, after a thorough analysis of the control and supervisory systems long used by the Armani Group for its supply chain, 'the excellent result the Company is believed to have achieved was made possible – in a short timeframe — precisely because structured and tested supply chain control systems were already in place at the time the measure was applied',' it said. The Italian luxury company added that throughout the AGCM investigation, it complied with the latter's requests but couldn't 'establish a constructive relationship with them to fully understand the reasons for its position.' This development comes on the heels of a yearlong turmoil in the Italian high-end fashion supply chain which has faced allegations that it has frequently failed to uphold the principles of quality, work ethics and sustainability that the sector has long prided itself on. Such allegations that have swirled in media reports and on social media follow recent cases of alleged workers' exploitation, abuse and sweatshop schemes in the Italian fashion supply chain. The most recent links Loro Piana to sweatshop subcontractors that the brand failed to properly audit and follows earlier similar incidents for Valentino, Alviero Martini and Dior, in addition to Giorgio Armani. All brands have been put under judicial administration, with the latter two brands' probes fully resolved and the judicial administration procedures lifted. Last week the president of Camera Nazionale della Moda Italiana Carlo Capasa got vocal on the topic, defending the country's high-end fashion supply chain against those claims and so did Confindustria Moda president Luca Sburlati and Confindustria Accessori Moda president Giovanna Ceolini. Industry associations and trade unions are pressuring the Ministry of Enterprises and Made in Italy to define a country-wide mandatory protocol and policy to ensure the sector complies with fair work standards. A fashion roundtable held last week at the Ministry moved the conversation forward, although no advancement is expected before the end of the summer. As many of the claims of alleged work abuse have entailed companies based in the Lombardy region, the Milan Prefecture promoted in May a memorandum of understanding to tackle worker exploitation, undeclared work, tax evasion, and unfair contractual practices in the fashion supply chain. Confindustria Moda, Confindustria Accessori Moda and Camera Nazionale della Moda Italiana were among other entities which undersigned the non-legally binding memorandum, which defines an action plan to tackle those issues. 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