Loro piana, an Italian high-end cashmere brand acquired by French luxury group Louis Vuitton Moet Hennessy (LVMH), has been designated as a subject of judicial management for its involvement in illegal low-wage and long-time work through Chinese subcontractors.
According to the Italian daily Corrieredela Sera on the 14th, a Milan court said that Loro piana had gained unfair advantage by condoning the illegal activities of its subcontractors and would go into judicial management for the next year.
While producing cashmere jackets,Loro piana entrusted the manufacturing to a primary subcontractor, which in turn re-subcontracted to a Chinese subcontractor near Milan. The secondary subcontractor was found to have overworked Asian workers who were staying illegally even at night and on holidays and worked in poor environments that ignored hygiene and safety standards. The authorities confirmed that they worked long hours that far exceeded the legal working hours through power consumption data, and the dormitories where workers stayed were found to be illegal facilities. In fact, the price of the luxury jacket sold was only 80 euros.
This is not the first time that the problem of multi-level subcontracting and low wages of luxury brands has been revealed. Since 2023, Valentino, Dior, and Armani have been under court receivership for similar reasons. According to global consulting firm Bain, Italy is a key hub for producing 50%-55% of the world’s luxury goods.
LVMH acquired an 80% stake in Loro piana in 2013, with the remaining 20% held by the founder’s family.
SALLY LEE
US ASIA JOURNAL
