A series of raids in Italy has starkly exposed the disparity between the glamorous facade of Milan's fashion world and the harsh realities of luxury goods production. The Wall Street Journal reported that according to an investigation by Milan prosecutors, local factories that manufacture handbags and leather goods for Dior and Armani have been found to exploit foreign labour, using them to produce high-end products at a fraction of their retail prices. Documents reviewed as part of the probe reveal shocking details: Dior pays a mere €53 per handbag to its suppliers, which it then sells in stores for €2,600, while Armani's bags, initially bought for €93 from suppliers, are resold to the brand for €250 and subsequently priced around €1,800 in stores.
These costs exclude expenses for materials like leather, with additional expenditures covered separately for design, distribution, and marketing. The investigations further revealed that some of these factories, all located in Italy , also manufacture goods for other renowned fashion labels. Prosecutors have criticized the luxury companies for failing to oversee their supply chain.
However, the companies do not face charges related to these findings. Some of the independently owned suppliers could face charges for worker exploitation and employing workers without proper documentation. Dior, owned by luxury giant LVMH, did not comment on the report.
However, Armani said it had “control and prevention measures in place t.
