Prosecutors in Milan have alleged that recent raids in Italy found that Dior and Armani have engaged in exploitative labor practices in constructing its luxury handbags.
As reported by The Wall Street Journal, Milan prosecutors recently launched an investigation into working conditions at local factories and made some startling discoveries. Workshops that had been contracted to produce handbags and leather goods for Dior and Armani were found to have produced luxury goods at incredibly low prices by paying migrant workers as little as $2 an hour.
Prosecutors said that Dior paid one supplier just $57 to produce some of its luxury handbags, despite the retail price of the product being $2,780. Armani bags were also sold to a supplier for $100, with the product in question fetching a price point of roughly $1,950.
"Why does it cost so little to manufacture the product?" said Fabio Roia, who is overseeing the investigation. "The brands need to ask themselves this question."
Dior has not commented on the investigation, but Armani said it had "control and prevention measures in place to minimize abuses in the supply chain," and will cooperate with authorities.
"The customer expectation is really high, especially when you are increasing the price so aggressively," said Fabio Becheri, who previously worked at Gucci and its parent company Kering.
During a raid at one of the facilities, prosecutors alleged that three illegal immigrant workers attempted to flee the scene before they were apprehended by authorities. Inspectors at one of the facilities found that many workers have been subjected to "hygiene and health conditions that are below the minimum required by an ethical approach."
