Armani and Dior face probe into their labour practices

Frederic Arnault, chief executive of Christian Dior-owner LVMH: Italy's antitrust regulator said Dior and Giorgio Armani may have used supplies from laboratories which employed workers receiving 'inadequate' wages.

Italy’s competition authority has opened an investigation into some companies controlled by luxury fashion groups Giorgio Armani and LVMH’s Christian Dior over alleged unfair commercial practices.

The antitrust regulator said the two brands may have used supplies from laboratories which employed workers receiving “inadequate” wages.

In addition, these workers sometimes had to work illegally long hours in inadequate health and safety conditions, which was “in contrast to the boasted levels of production excellence” at the brands, the regulator said in a statement Wednesday.

It is the latest move by authorities in Italy to crack down on alleged unlawful business conduct in the fashion industry.

In June, a Milan court put a unit of the French fashion house Dior under judicial control, citing alleged labour violations in its supply chain. Dior, which produces luxury bags and accessories in Italy, did not “prevent and stem labour exploitation within its production cycle”, the Italian police said at the time.

Similarly, in April, a Milan judge placed the manufacturing unit of Armani under the same control for alleged worker exploitation.

On Tuesday, financial police and antitrust officials searched the headquarters of Giorgio Armani and Christian Dior Italia, according to the statement.

Armani Group said it was aware of the investigation.

“The companies involved are fully committed to co-operate with the authorities, believe that the allegations have no merit and are confident of a positive result following the investigation,” the Italian company added in a written statement.

Bloomberg