After the cases of Armani Operations, Dior, and Valentino, and a memorandum of understanding promoted by the Court and Prefecture to promote legality, transparency, and combat worker exploitation in the fashion supply chain, another luxury brand has been placed under judicial administration.

This is the Loro Piana brand, known for its cashmere clothing and which is chaired by LVMH-Moet Hennessy Louis Vuitton, the group headed by the Arnault family.

Yesterday morning, the Milanese judges of the Prevention Measures Section issued a ruling ordering the appointment, for one year, of a director with the task of assisting the current management to "remove those toxic situations" —to use the words written by prosecutor Paolo Storari—found during investigations by the Milanese Labor Protection Group into the Vercelli-based high-quality yarn company, which was said to have been incapable of preventing and stemming labor exploitation, which it had instead "culpably" facilitated.

As stated in the document, he did not "effectively monitor the production chain, verifying the real entrepreneurial capacity of the companies with which he signed supply contracts and the actual production methods" they "adopted, failing to take timely and adequate steps to effectively monitor the subcontracting supply chain, up to the point of terminating commercial ties."

According to the investigations, Loro Piana, whose board of directors is chaired by Antoine Arnault, outsourced the production of clothing (including cashmere jackets) to Evergreen, an external company. Unable to produce the requested amount, the company subcontracted the work to Sor-Man snc of Nova Milanese, which also lacked adequate production capacity. According to the Prosecutor's Office, the latter also turned to Chinese factories—closed down by the military, with one of the owners arrested in May following a complaint—to cut costs. These factories allegedly employed "illegal and clandestine labor, in unhealthy and dangerous work environments," housed "in illegal dormitories in order to recruit mere laborers at any time of the day or night, and subjected them to work shifts (...) far exceeding those contractually stipulated," without breaks or holidays.

This system would have allowed for maximizing profits. Indeed, as the judges wrote, each piece of outerwear was sold in the luxury brand's stores for between €1,000 and €3,000, "with a markup of between €1,000 and €2,000."

Meanwhile, as Sor-Man's legal representative told investigators, with Loro Piana "the agreed-upon price was 118 euros per jacket if the order was for more than 100 pieces; if it was less, which was rare, the price was 128 euros per item." Meanwhile, "I paid the Chinese companies 80 euros per piece if they didn't cut it, and 86 euros if they did. Then, depending on the other processes, the price could fluctuate by 5 or 10 euros."

The company, which the prosecutor has harshly criticized in his request for judicial administration, now has one year to comply.

(Unioneonline)

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