Luxury brand Loro Piana, owned by LVMH, has been placed under a one-year judicial administration by an Italian court after a labor exploitation investigation uncovered serious abuses within its supply chain. According to Reuters, workers at a subcontracted factory were paid as little as €4 per hour and subjected to 90-hour workweeks, often living inside the premises. One worker was reportedly attacked after requesting unpaid wages, requiring 45 days of medical treatment.
The case highlights the growing scrutiny of labor conditions in Italy’s fashion manufacturing sector, especially among high-end labels. Loro Piana is now the fifth luxury brand, joining Dior, Armani, Valentino, and Alviero Martini, under court supervision due to supplier-related violations.
A Complicated Web of Subcontracting
What sets this case apart is the complexity of the supply chain. Loro Piana did not contract directly with the workshop where the violations occurred. Instead, it worked through two front companies, both of which lacked actual manufacturing capacity. These intermediaries then subcontracted the work to a network of unregistered or poorly monitored producers. All the firms involved in this chain have been swept up in the investigation.
This multi-tier outsourcing structure made it difficult to detect violations and raises questions about accountability. The Milan court noted that Loro Piana "culpably failed" to supervise its partners, prioritizing cost and output over due diligence.
Why ItMatters
Luxury brands trade on trust and exclusivity. Consumers expect not just quality, but integrity, especially regarding sourcing. When serious labor violations are revealed, the reputational risks extend far beyond one product or supplier. They affect brand credibility, investor confidence, and long-term consumer loyalty.
This incident also reinforces a trend: regulators are increasingly willing to intervene when voluntary monitoring fails. Judicial administration isn’t just symbolic; it’s a legally binding oversight mechanism aimed at forcing systemic change.
The Path Forward
For fashion brands, this is a clear signal that supply chain governance must go deeper. That includes mapping indirect suppliers, improving transparency around subcontracting, and enforcing ethical standards at every level. Simply trusting the next link in the chain is no longer enough.
In a sector built on craftsmanship and heritage, safeguarding those values behind the scenes is just as important as what ends up on the runway.
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