Italian Court Puts Spotlight on Loro Piana for Supply Chain Violations

An Italian court has placed Loro Piana, the high-end cashmere firm under the LVMH group, under judicial administration for a year. This action comes after accusations of worker abuse uncovered within its supply chain, marking another incident affecting Italy's luxury brands. The ruling follows the court's targeting of five fashion companies, including units of Valentino and Dior, since 2023 due to labor issues.

The court identified Loro Piana's failure to adequately oversee its subcontractors, which allegedly outsourced production to Chinese-owned workshops in Italy that exploited workers. An external administrator has been appointed to ensure the company fulfills legal obligations regarding its supply chain management. Loro Piana, a company acquired by LVMH in 2013, has not faced any criminal charges itself, and the measure could be lifted if the company complies with legal standards.

This move by the Milan court occurs amid ongoing investigations into Italian fashion brands for worker exploitation, despite a recent accord signed to combat the issue. Notably, Loro Piana is not currently under criminal investigation, though owners of subcontracting firms are being scrutinized. The luxury fashion sector in Italy, notable for its significant contribution to global luxury goods, faces a systemic challenge in addressing these labor violations.

(With inputs from agencies.)