Italy Antitrust Probes Armani, Dior over Alleged Exploitation of Workers

FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo
FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo
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Italy Antitrust Probes Armani, Dior over Alleged Exploitation of Workers

FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo
FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo

Italy's competition authority said on Wednesday it had begun an investigation into luxury fashion groups Armani and Dior over the alleged exploitation of workers in their supply chain.
In June and April, Milan prosecutors ordered that several Chinese-owned firms in Italy - producing luxury goods for Dior and Armani - be placed under administration, accusing them of systematically abusing their employees.
The regulator alleged that Armani and Dior "emphasized the craftmanship and the excellence of their workmanship" while relying on workshops employing people on inadequate salaries, working long hours and in violation of health and safety rules.
The probe focused on some companies of the Armani Group and the LVMH-controlled Dior Group, and inspections were carried out at the companies on Tuesday, Reuters quoted the agency as saying.
"The (Armani and Dior) companies may have made untrue ethical and social responsibility claims, in particular with regard to working conditions and compliance with legality at their suppliers," the antitrust agency said.
They were placed under investigation "for possible unlawful conduct in the promotion and sale of articles and clothing accessories, in breach of the (Italian) Consumer Code," it said.
Armani and LVMH did not immediately respond to requests for comment.
Breaches of the consumer code are punishable with fines ranging from 5,000 euros ($5,456) to 10 million euros ($10.91 million).
The luxury industry's supply chain has come under increased scrutiny by consumers and investors in recent years. To reduce risks to their reputation, fashion labels have curbed the number of sub-contractors and brought production in-house.
Italy's antitrust agency also polices consumer rights and unfair commercial practices. Last year, it fined companies owned by fashion influencer Chiara Ferragni almost 1.1 million euros over misleading charity claims on a Ferragni-branded Christmas cake.



Adidas Reports Fourth-Quarter Sales and Profitability Gains

An Adidas shoe is seen in a store at the Woodbury Common Premium Outlets in Central Valley, New York, US, February 15, 2022. (Reuters)
An Adidas shoe is seen in a store at the Woodbury Common Premium Outlets in Central Valley, New York, US, February 15, 2022. (Reuters)
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Adidas Reports Fourth-Quarter Sales and Profitability Gains

An Adidas shoe is seen in a store at the Woodbury Common Premium Outlets in Central Valley, New York, US, February 15, 2022. (Reuters)
An Adidas shoe is seen in a store at the Woodbury Common Premium Outlets in Central Valley, New York, US, February 15, 2022. (Reuters)

Adidas reported what it said were better than expected preliminary fourth-quarter results on Tuesday, with strong sales and profitability for the important holiday shopping period.

The German sports equipment and apparel company said revenue was up 19% year on year in currency neutral terms while its gross margin increased by 5.2 percentage points to 49.8%.

Adidas reported sales of 5.956 billion euros ($6.2 billion) for the quarter, up from 4.812 billion a year ago.

For the full year, Adidas said revenue was up 12% in currency-neutral terms, hitting 23.683 billion euros ($24.7 billion). Profitability improved with the gross margin rising by 3.3 percentage points to 50.8%.