Italian Prosecutors Probe Supply Chain of Around a Dozen Fashion Brands

This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district,  Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)
This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district, Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)
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Italian Prosecutors Probe Supply Chain of Around a Dozen Fashion Brands

This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district,  Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)
This photograph shows Milan's skyline with the Unicredit Tower (CL) next to "Bosco Verticale" (Vertical Forest) residential tower (C), Unipol Tower (2R) at Porta Nuova district, Milan, on June 6, 2024. (Photo by GABRIEL BOUYS / AFP)

Prosecutors in Milan are investigating the supply chain of around a dozen more fashion brands, a person with knowledge of the matter said, after a unit of France's LVMH in Italy was placed under court administration in a worker exploitation probe.
On Monday, a Milan court appointed a commissioner to run an LVMH-owned maker of Dior-branded handbags after an investigation into four of its suppliers based in the surroundings of Italy's fashion capital uncovered illegal working conditions for staff.
On-site inspections and checks on electricity usage data led prosecutors to allege workers were employed for extended hours, working often into the night and during holidays. Some of the staff slept where they worked, had no regular contracts, with two having illegally immigrated into Italy.
This is the third such decision this year by the Milan court in charge of pre-emptive measures, which in April took similar steps in relation to a company owned by Giorgio Armani due to accusations the fashion group was "culpably failing" to properly oversee its suppliers. Armani Group said at the time it had always sought to "minimize abuses in the supply chain".
LVMH on Monday declined to comment on the court's decision.
Milan prosecutors and Italian police are investigating further small manufacturers that supply around a dozen other brands, the person told Reuters, declining to provide additional details because the information is confidential.
The appointment of a special commissioner is intended to give the fashion brands' subsidiaries time to fix problems in their supply chain while continuing to operate.
Neither LVMH nor Armani are under investigation, while the suppliers targeted by the probe face accusations of worker exploitation, copies of the court decisions seen by Reuters showed.
'MADE IN ITALY'
Milan prosecutors have been investigating for the past decade recruitment firms that allegedly illegally employed workers, evading taxes, as well as welfare and pension contributions, to slash the cost of the services they supplied.
The probes traditionally targeted sectors such as logistics, transportation and cleaning services, where workers were supplied by firms that sprung up and were wound down every couple of years.
The focus then shifted onto the fashion sector, where probes have highlighted similar problems this year.
Italy accounts for 50% to 55% of the global luxury goods production, consultancy Bain calculated, with thousands of small manufacturers supplying big brands and allowing them to sport the prized 'Made in Italy' label on their goods.
The latest Milan investigation has shown a small manufacturer was able to charge Dior as little as 53 euros ($57) to make a handbag, which the fashion house then sold in shops at 2,600 euros.
Under Italian law, brands outsourcing production are responsible for carrying out adequate checks on suppliers.
In the past, the measures taken by Italian magistrates in relation to worker exploitation probes concerned only the suppliers who mistreated workers.
However, Milan prosecutors have been able to make use of a provision in the law that was originally designed to deal with companies infiltrated by the Mob.
These companies would be placed under court, or judicial, administration through the appointment of special commissioners to run them.



Saudi Fashion Commission, Kering Start Screening for 'Kering Generation Award X Saudi Arabia' Winners

The Saudi Fashion Commission logo
The Saudi Fashion Commission logo
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Saudi Fashion Commission, Kering Start Screening for 'Kering Generation Award X Saudi Arabia' Winners

The Saudi Fashion Commission logo
The Saudi Fashion Commission logo

The Fashion Commission and luxury group Kering have launched the selection process for winners of the "Kering Generation Award X Saudi Arabia," a collaborative initiative aimed at training and supporting twenty innovative startups that are making a significant impact in the fashion industry.
The partnership focuses on emphasizing sustainable practices, exploring innovative startups within the fashion and commodities sectors, and establishing award criteria, selection procedures, and development programs for participants.
The application process began in November 2024, inviting startups to submit their applications and embark on a journey toward promoting sustainability. Over 100 startups applied for the program, and 20 were selected to participate in a three-day training camp in Riyadh. The program featured workshops that concentrated on the development of key performance indicators and goal setting, as well as pitching skills.
On January 14, the shortlist of 20 startups convened in Riyadh for the final presentation session, where each applicant was evaluated according to the three key criteria: customer engagement, circular economy, and water protection.
Following the presentation, the evaluation process commenced to select the top 10 proposals, which the jury will assess based on innovation, relevance to the topic, connection to fashion, and potential impact on nature and society.
The awards ceremony for the "Kering Generation Award X Saudi Arabia" is scheduled for January 27 in Riyadh; the top three winning startups will be announced.
Winners will have the opportunity to participate in a week-long trip to Paris for exclusive mentoring with Kering's sustainability teams and present their innovations at the ChangeNOW Summit 2025.
Fashion Commission CEO Burak Cakmak said that sustainability is central to the Fashion Commission's vision for the industry's future.
He added that the Kering Generation Award X Saudi Arabia aims to showcase and support startups that are fostering significant innovation in circular fashion and environmental stewardship.
Cakmak said the initiative demonstrates the commission’s commitment to advancing solutions that tackle current challenges while paving the way for a more sustainable future in fashion.