Italy’s Fashion Brands Sign Accord to Fight Worker Exploitation

General view of Milan Court of Justice in Milan, Italy, April 26, 2024. (Reuters)
General view of Milan Court of Justice in Milan, Italy, April 26, 2024. (Reuters)
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Italy’s Fashion Brands Sign Accord to Fight Worker Exploitation

General view of Milan Court of Justice in Milan, Italy, April 26, 2024. (Reuters)
General view of Milan Court of Justice in Milan, Italy, April 26, 2024. (Reuters)

Italian legal and political authorities, fashion industry bodies and trade unions signed an action plan on Monday to fight worker exploitation in the apparel and accessories supply chain, after prosecutors uncovered widespread abuse.

Italy accounts for half the world's production in the luxury fashion industry.

The plan, which is not legally binding, is an attempt to tackle what Milan prosecutors have described in documents seen by Reuters as "a generalized manufacturing method" that puts lives at risk to boost profits.

A first draft of the scheme was proposed by a Milan court in June last year, after prosecutors uncovered workshops where underpaid workers, often irregular immigrants, produced leather bags sold to Dior and Armani for a tiny fraction of their retail price.

This month an Italian court placed a unit of Valentino under judicial administration for a year, after uncovering worker abuse in its supply chain.

"The goal is that the court will no longer have to intervene," Fabio Roia, the president of Milan's court system, told journalists on the sidelines of the memorandum signing.

The memorandum of understanding - reviewed by Reuters - focuses on the creation of a database of brands' suppliers and their workforces.

Supply chain firms will voluntarily enter their data on the platform, including information on tax compliance, social security contributions and labor law compliance, with updates at least every six months.

According to Monday's agreement, fashion brands must commit to raising awareness of the new platform among their suppliers and urge them to enter their data. However, they may still use suppliers and subcontractors that fail to do so.

The regional government of Lombardy, around Milan, will issue firms that sign up to the scheme with a six-month renewable certificate of transparency.



Estee Lauder Beats Quarterly Sales Estimates, to Cut More Jobs

Estee Lauder beat Wall Street estimates for third-quarter sales on Friday. (Getty Images via AFP)
Estee Lauder beat Wall Street estimates for third-quarter sales on Friday. (Getty Images via AFP)
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Estee Lauder Beats Quarterly Sales Estimates, to Cut More Jobs

Estee Lauder beat Wall Street estimates for third-quarter sales on Friday. (Getty Images via AFP)
Estee Lauder beat Wall Street estimates for third-quarter sales on Friday. (Getty Images via AFP)

Cosmetics maker Estee Lauder beat Wall Street estimates for third-quarter sales on Friday, driven by improving sales in China ‌and Europe ‌as CEO ‌Stephane ⁠de La Faverie's turnaround ⁠plan takes hold, sending its shares up 16% premarket.

The company, which has ⁠been in talks ‌to ‌merge with Jean ‌Paul Gaultier-owner Puig, posted ‌quarterly sales of $3.71 billion, compared with analysts' estimates of $3.69 billion, according to ‌data compiled by LSEG.

The company ⁠also ⁠revised its job cut target to a range of 9,000 to 10,000 from the previously estimated range of 5,800 to 7,000.


Armani 2025 Revenue Fell 2.8%, CEO Hasn't Met Potential Buyers

FILE - Actress Cate Blanchett, from left, designer Giorgio Armani, and actress Julia Roberts pose for photographers upon arrival at the British Fashion Awards in central London, Dec. 2, 2019. (Photo by Joel C Ryan/Invision/AP)
FILE - Actress Cate Blanchett, from left, designer Giorgio Armani, and actress Julia Roberts pose for photographers upon arrival at the British Fashion Awards in central London, Dec. 2, 2019. (Photo by Joel C Ryan/Invision/AP)
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Armani 2025 Revenue Fell 2.8%, CEO Hasn't Met Potential Buyers

FILE - Actress Cate Blanchett, from left, designer Giorgio Armani, and actress Julia Roberts pose for photographers upon arrival at the British Fashion Awards in central London, Dec. 2, 2019. (Photo by Joel C Ryan/Invision/AP)
FILE - Actress Cate Blanchett, from left, designer Giorgio Armani, and actress Julia Roberts pose for photographers upon arrival at the British Fashion Awards in central London, Dec. 2, 2019. (Photo by Joel C Ryan/Invision/AP)

Italian fashion group Armani said on Wednesday its revenue fell 2.8% at constant exchange rates last year, weighed by a weak performance of its wholesale channel.

In 2025, the company's revenue totaled 2.2 billion euros ($2.57 billion), while total turnover, including direct licensee sales, was 4 billion euros.

"We face a possible structural change in the approach to luxury and fashion ⁠by current consumers ⁠and potential, which must be taken into account," Reuters quoted Armani group CEO Giuseppe Marsocci as saying in a statement.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 3.2% year-on-year to 152.7 million euros, while operating ⁠profit increased 2% to 52.6 million euros.

Trends in the first months of 2026 were in line with the previous year, with unfavorable currency movements weighing on performance.

Giorgio Armani, the group's founder who died last September, instructed his heirs to sell an initial stake in the company to players such as L'Oreal, EssilorLuxottica and French ⁠luxury ⁠giant LVMH.

In an interview with Italy's Sole 24 Ore published on Wednesday, Marsocci said there was no update on the group's shareholding structure, adding that interest in the Armani group remained strong.

"We have not started meetings with the three potential buyers, and there are no tensions among the family members," Marsocci said in a separate interview with WWD magazine.


Ferragamo Expands Leather Mapping Efforts as EU Sustainability Rules Take Shape

James Ferragamo, a chief product officer for the Salvatore Ferragamo group, talks with journalists during an interview with the Associated Press, in Milan, Italy, Wednesday, April 22, 2026. (AP Photo/Antonio Calanni)
James Ferragamo, a chief product officer for the Salvatore Ferragamo group, talks with journalists during an interview with the Associated Press, in Milan, Italy, Wednesday, April 22, 2026. (AP Photo/Antonio Calanni)
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Ferragamo Expands Leather Mapping Efforts as EU Sustainability Rules Take Shape

James Ferragamo, a chief product officer for the Salvatore Ferragamo group, talks with journalists during an interview with the Associated Press, in Milan, Italy, Wednesday, April 22, 2026. (AP Photo/Antonio Calanni)
James Ferragamo, a chief product officer for the Salvatore Ferragamo group, talks with journalists during an interview with the Associated Press, in Milan, Italy, Wednesday, April 22, 2026. (AP Photo/Antonio Calanni)

Italian luxury brand Ferragamo said it can map the country of origin for much of the leather used to make its coveted footwear and handbags, a first step in traceability according to experts.

The announcement comes during a wave of European Union sustainability rules that are increasing pressure on fashion brands to account for materials in their supply chains.

The family-run and publicly traded fashion house has been issuing sustainability reports for over a decade, but the 2025 report released March 31 is the first that contains figures on material traceability — notably for leather, which experts say is harder to trace than textile fibers such as cotton.

“We have been using leather in a more sustainable way,’’ James Ferragamo, the brand’s chief product officer and grandson of founder Salvatore Ferragamo, told The Associated Press in an interview last week. “I think it is one of the more sustainable materials in my point of view.”

Most of the tanneries working with the brand “control their water, have fair treatment of the workforce, monitor their supply chain ensuring that they’re buying leather from those who are not deforesting, and taking the right approach also in terms of breeding and animal welfare,” he said.

Traceability in fashion sustainability Traceability of materials is considered a first and necessary step for the fashion industry, which is facing a new EU framework that will require brands and their suppliers to ensure the items they produce are sustainable from the drawing board to end-of-life disposal. Precise terms are still being defined and compliance will be phased in over the coming years.

“Traceability is an essential factor, but it’s not sufficient,’’ said Francesca Romana Rinaldi, a sustainability expert and director of the Monitor for Circular Fashion at SDA Bocconi School of Management. “It enables the implementation of sustainability and circularity.”

She said that any company that is not tracing their materials “doesn’t know their supply chain” and “could be also criticized for greenwashing.”

EU regulations and directives are moving toward full circularity of materials to include measures extending the life cycle of garments, accessories and footwear through repairs and end-of-life management, including recycling and upcycling, she said.

The EU is also phasing in restrictions on destroying unsold apparel, accessories and footwear produced by companies with more than 250 employees and more than 40 million euros ($46.8 million) in annual revenues.

From breeding to assembly The family-run fashion house was founded in 1927 by Salvatore Ferragamo in Florence, after his return from Hollywood, where he had established himself as shoemaker to the stars with clients including Marilyn Monroe and Judy Garland. Material scarcity during World War II pushed Ferragamo to experiment with alternatives, substituting wicker for leather and using cork for soles, the younger Ferragamo said.

In keeping with its origins, Ferragamo remains primarily a footwear and leather goods maker. Together, they comprised 86% of 2025 sales of 976.5 million euros ($1.1 billion).

Ferragamo launched its initiative on leather traceability with the calf leather used for its Fiamma bag, tracing it from breeding to assembly, the group announced in its 2024 annual report.

In 2025, Ferragamo enlisted tanneries supplying 80% of the hides it buys in a project to identify the country of origin of raw materials through supplier declarations. When including textiles such as cotton, silk and nylon, the company says 81% of its materials are certified under third-party sustainability standards.

“Today there is not one single solution, one single technological solution to trace the leather to the birth farm of the cows,’’ said Davide Triacca, Ferragamo’s sustainability director. “We got to that result through a very dedicated and consistent approach and today we are able to trace more than 80% of the entire leather that we supply and the vast majority of which comes from Europe.”

The EU does not require leather to be traceable. Sustainability experts underscore that approaches based on country-level mapping and supplier declarations do not establish a full chain of custody and instead reflect an early stage of traceability.

Ferragamo previously included a capsule collection with silky textiles made from orange fibers in 2017, one of its first research investments. More recently it used nylon from castor oil instead of fossil oil for a men’s tote bag, and its Back to Earth collection featured the brand’s trademark Hug handbag treated with vegetable dyes.

“Research keeps on going. It’s something that we’re doing all the time,'' Ferragamo said.

“We’re trying to find different ways of creating different materials. And sometimes the materials that we produce are not ready for market. But it doesn’t mean that we don’t experiment.”