Luxury houses Dior and Armani targeted by an investigation into the working conditions of their subcontractors

The Italian competition authority is also investigating possible breaches of consumer law related to the way some companies in the Armani and Dior groups promote and sell.

The Italian competition authority has opened an investigation into luxury group Giorgio Armani and Dior Italia, suspected of having been lax about the working conditions of their subcontractors. Searches were carried out on Tuesday, July 16, with the support of the special antitrust unit and the Italian financial guard, at the headquarters of Giorgio Armani and Dior Italia, the competition authority (AGCM) said.

“The companies have focused on quality and craftsmanship. However, to produce some items and accessories, they are suspected of using workshops and factories that employ workers who are paid inadequate wages.” she says. “In addition, these employees were working more hours than the legal maximum allowed and in inadequate health and safety conditions, in stark contrast to the levels of manufacturing excellence that the companies pride themselves on.“, according to the same source.

The Italian competition authority is also investigating possible breaches of consumer law relating to the way certain companies in the Armani and Dior groups promote and sell their products.In both cases, the companies may have disclosed false statements regarding social and ethical responsibility, particularly regarding working conditions and compliance with legislation by their suppliers.“, added the competition authority.

The Armani group assured in a press release that “The companies concerned are fully committed to cooperating with the authorities“, considering that “the allegations are unfounded” and “the investigation will result in a positive outcome“. When questioned, the Christian Dior company did not immediately comment. A company of the luxury group Armani had been placed partially under judicial administration by the Milan court last April for having used subcontractors, violating labor law. The company in question is Giorgio Armani Operations spa, controlled and overseen by Giorgio Armani spa, and which is in charge of the collections and accessories of the prestigious Italian group, the court had specified in its decision.

According to the court, the company allegedly used a supplier, Manifatture Lombarde srl, which itself used subcontractors who placed orders with Chinese workshops operating in the province of Milan and employing undocumented immigrants, for the production of Armani bags, leather goods and accessories.

In June, a Milan court ordered another major fashion company to be placed in receivership for similar reasons. According to media reports, it was Manufactures Dior Srl, a unit of Christian Dior Italia, the Italian arm of the luxury group owned by French giant LVMH. The company outsourced production of part of its 2024 collection of bags and accessories to third parties, according to a police statement.

An investigation identified suppliers described as “Chinese companies, which managed to reduce their costs by using irregular and illegal workers in exploitative conditions“. Four such companies were inspected,”all irregular“, according to police. They employed 32 people, seven of whom did not have the required documents and two of whom were in an irregular situation in Italy. The workers were poorly paid for long working hours and housed in illegally built and unsanitary dormitories, according to the same source.