Loro Piana Under Judicial Administration in Italy Over Labor Abuse Accusations

Loro Piana faces Italian courts over its value chain. The company has found itself in the crosshairs of the Italian judiciary following a ruling that forces the LVMH-owned fashion and luxury firm to spend a year under judicial administration for alleged labor exploitation. During this time, a judge will monitor its workforce and supervise its accounts.

Loro Piana is not the only Italian company to have been hit by labor scandals, according to the Milan court ruling. It would be the fifth, after the fashion brands Valentino, Dior (also owned by LVMH) Armani and Alviero Martini were also placed under tutelage, according to Reuters news agency on Monday.

According to the court, Loro Piana subcontracted its production through two companies with no manufacturing capacity to Chinese-owned workshops in Italy that were engaged in exploiting workers. For the court, Loro Piana’s goal was to make more money.

Loro Piana subcontracted to two Chinese manufacturers who did not have permits and who exploited their workers in order to allegedly make more money

The ruling uses the above cases to charge Loro Piana even more harshly for failing to stop the situation despite the “wide dissemination” of the other four cases. In addition, it points out that the situation continued even after representatives of the Italian fashion brands signed an agreement to fight against the exploitation of workers.

In the ruling, prosecutors considered that the violation of labor standards was “widespread and consolidated” among Italian fashion companies. In the country, small manufacturers account for more than half of the world’s production of luxury goods, according to the consulting firm Bain.

The Loro Piana case came to light after the Carabinieri police of Milan’s labor protection unit arrested a Chinese workshop owner and shut down his factory for various abuses. Inside were Loro Piana brand cashmere jackets. The owner claimed to have manufactured more than 6,000 garments for the brand in recent years.

LVMH, the world’s largest luxury group, acquired 80% of Loro Piana in July 2023, while the remaining 20% remained in the hands of the founding Loro Piana family.