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Mint
an hour ago
- Business
- Mint
Italy Cracks Down on Sweatshops Feeding Loro Piana, Armani, Dior
(Bloomberg) -- For a decade, a Chinese tailor toiled in a three-story building on the outskirts of Milan, working 13 hours a day making high-end garments for brands including Italian cashmere label Loro Piana. The unnamed worker was paid off-the-books, earning roughly €1,500 ($1,742) a month, according to legal documents seen by Bloomberg — about the price of one Loro Piana baby cashmere sweater. He became part of a hidden, underground labor force, employed by third parties, who craft luxury clothing for Italy's most renowned fashion houses. His case, which came to light after the tailor's boss stopped paying wages and allegedly attacked him, became part of an ongoing probe of persistent worker abuses in one of Italy's most important industries. For two years, prosecutors have sought to reform an export model where premium brands sell Italian fashion abroad at luxury prices, even as inexpensive workshops proliferate around Milan, flouting labor standards in Italy's capital of style. The crackdown, led by Milan's corporate court and the labor-crimes unit of the Carabinieri military police, has snared contractors linked to five well-known fashion labels including Valentino, Armani and Dior. Loro Piana, owned by French luxury powerhouse LVMH Moët Hennessy Louis Vuitton SE, became the latest on Monday, and was placed under court supervision for up to a year. 'There is already a reputational issue in the fashion industry, which started with prices spiraling unreasonably,' said Stefania Saviolo, a lecturer on fashion and luxury management at Milan's Bocconi University. 'These investigations not only damage the brands involved, they affect all of Made in Italy as a system.' Loro Piana, part of LVMH since 2013, denied wrongdoing and said it will cooperate with authorities. The company said it terminated relations with the supplier within 24 hours of being informed of the contractors' existence. The fragmented, mostly family-run structure of high-quality Italian manufacturing 'can pose challenges in transparency and oversight,' said Toni Belloni, president of LVMH Italy. The group has strengthened controls and revised its internal charter, he said in a statement to Bloomberg News. 'However, areas of fragility remain, so we must work to improve our practices.' The fashion industry is one of Italy's biggest, accounting for about €96 billion worth of Made in Italy products in 2024, according to industry group Camera Nazionale della Moda. The vast majority are destined for overseas markets. Yet the tailor's case shines a light on the treatment of workers who make garments that can cost thousands. He worked from 9 a.m. to 10 p.m. daily through late 2024, when his 'caporale,' or boss — also a Chinese transplant — stopped paying him for unknown reasons, according to the court documents. After repeated demands for his wages, a confrontation ensued. The employer punched the tailor and beat him repeatedly with an aluminum tube, the documents said, leading to a criminal complaint. Past enforcement efforts have failed to stamp out labor abuses. 'These cases have been increasing in the last few years, with more big groups taking control of smaller Italian companies and starting outsourcing part of the production,' said Roberta Griffini, secretary for the Filctem CGIL Milano union. Responsibility is sometimes hard to determine because subcontractors work for more than one fashion group, Griffini added. The UK has also cracked down on illegal sweatshops, particularly small factories operating in cities such as Leicester. A 2021 UK report found companies in numerous industries couldn't guarantee their supply chains were free from forced labor. For fashion producers in Italy, the supply chain should be short and closely monitored, said Saviolo of Bocconi University. Younger consumers in particular are paying more attention to brand credibility. Milan is the locus of the sprawling fashion industry in Italy, housing about one-fourth of the nation's 600,000 fashion workers across some 60,000 companies, according to Camera Nazionale della Moda. The Lombardy region's dense ecosystem of design studios, tanneries and sample makers gives brands unrivaled speed but also shelters what prosecutors called 'a generalised manufacturing method' in which legitimate subcontractors parcel out work to micro-factories operating from converted garages and semi-legal industrial parks. Chinese-owned firms make up a significant part of this complex. About 20% of Lombardy's 10,000-plus textile workshops and factories are Chinese-owned, according to Milan's Chamber of Commerce. The area has drawn a large number of Chinese immigrants, driven by small-business opportunities, globalization of the fashion industry and growing family ties. The judicial clampdown in Italy is unfolding against a jittery global backdrop, with demand falling and a US-led tariff war threatening to magnify export costs. The personal luxury-goods industry, worth €364 billion, lost 50 million customers in 2023 and 2024, Bain estimated last year. The sector will shrink between 2% and 5% this year, according to the consulting firm's June follow-up. Italy's fashion industry was already grappling with falling sales, inflation and international tensions. Brands squeezed by softer demand and volatile costs have doubled down on 'near-shoring' quick orders to Lombardy's workshop belt to protect margins. That very strategy, say prosecutors, is fueling the race to the bottom that the courts are now trying to halt. Investigators traced Loro Piana's knitwear to intermediaries which subcontracted to factories where illegal migrants worked 90 hours a week and slept next to their sewing machines. The judges said the firm 'negligently benefited' from illegal cost-cutting. The judicial administrator appointed Monday is tasked with monitoring Loro Piana management's progress toward addressing its supply chain. The issues have been similar at other luxury brands, including Giorgio Armani Operations, Dior Manufactures, Valentino Bags Lab and Alviero Martini: opaque layers of small subcontractors, paper safety records and a workforce of mostly undocumented Chinese migrants. Armani, Dior and Alviero Martini were released of court oversight after implementing measures such as real-time supplier audits. The unit of Valentino, which is owned by Kering SA and Qatar's Mayhoola, is still subject to court monitoring. The Italian Competition Authority has also been involved. In May it closed an unfair-practices probe into Dior, securing €2 million in funds for anti-exploitation initiatives and requiring the company to improve supplier vetting. Dior noted then that no infringement was established, and said it is dedicated to high standards of ethics and excellence. Armani Group, still under investigation by the competition authority over alleged unfair commercial practices, said the allegations have no merit and its companies are cooperating with authorities. In Milan, coordination has tightened with an accord in May between the Milan Prefecture, the fashion chamber, trade unions and leading brands. The pact sets up a shared database of vetted suppliers and commits signatories to regular certifications. The outcome of the Loro Piana case for now rests with updates to the bench on its progress. As for the tailor, the Milan prosecutor is now trying to get him hired legally, according to a person familiar with the matter, who asked not to be named discussing a personal matter. This would require the employer to make pension contributions, pay taxes and provide standard benefits. --With assistance from Antonio Vanuzzo, Deirdre Hipwell and Angelina Rascouet. More stories like this are available on
Fashion Network
2 days ago
- Business
- Fashion Network
LVMH's Toni Belloni: "Values that seemed consolidated for luxury customers are now being called into question"
On the occasion of the inauguration of the new Thélios factory, dedicated to the manufacture of metal eyewear, on July 10 in Longarone, Veneto, the president of LVMH Italy, Antonio (Toni) Belloni talks to about the projects and strategy of the number one luxury brand in the Peninsula, while also discussing the evolution of consumers and the luxury market. How strong is LVMH in Italy? Toni Belloni: The group has six Italian houses (Bulgari, Fendi, Pucci, Loro Piana, Acqua di Parma and Cova cafés, editor's note). It has 280 boutiques and 66 production workshops, employing more than 18,000 people in the country, while employing nearly 100,000 others through its network of more than 4,000 suppliers and subcontractors. The Italian ecosystem offers a particularly favorable context for the development of luxury brands. FNW: LVMH invested heavily in Italy last year. Will it continue to do so? TB: In 2024, we invested around 500 million euros in Italy, as a large number of projects came to fruition over the same period. Previously, we were investing more like 100 million euros, so I don't think we'll be deploying that kind of money again. But it does testify to the fact that the Group is continuing to commit to new, and even major, investments. FNW: What are LVMH's current projects in Italy? TB: For 2026, a new Louis Vuitton workshop dedicated to accessories will be built ex novo in Pontassieve, Tuscany. There's also Loro Piana's major project at Ghemme, in the cashmere district near Novara in Piedmont, which will set up an industrial complex around a historic building, bringing together under one roof its various workshops currently scattered around the valley, as well as other activities. We are also renovating a number of Belmond Group hotels, including the Hotel Cipriani in Venice. In Milan, the three flagships of Louis Vuitton, Bulgari and Tiffany & Co. were opened on Via Montenapoleone, followed by the three new openings on the same street of Fendi, Dior and Celine. FNW: In view of the economic situation, have you reviewed certain investments? TB: Investment projects are medium-term, and cannot be stopped or restarted from one day to the next. At the very least, we can delay the opening of a store for a few months, or postpone certain investments for the long term, but I think that the strategic commitment is to invest. First of all, on the store front. This year, we plan to open at least five of the six major stores I mentioned in Milan. But also in the supply chain, which I think still needs to be strengthened culturally in terms of training, but also from an infrastructure point of view. FNW: Have any of the planned investments been postponed? TB: Our strategic horizon, whether in the retail or industrial sectors, is three to five years. So we have to realize that we're betting on a market that will continue to grow in the medium to long term, while we're more cautious about the next six or even nine months. Clearly, we're not in a glorious market phase. But, as a reminder, the current situation follows a period of almost thirty months, from 2021 to mid-2023, of euphoric growth, which frankly was not sustainable. "We have carried out over 5,000 audits" FNW: How do you cope with this phase? TB: In the medium to long term, the group is making sure that the brands continue to be more desirable. In the short term, there is a management effort, but also an effort to adapt to a customer whose convictions are changing. Values that seemed extremely consolidated for luxury customers, such as the convergence of world cultures and globalization, are now being called into question. Connection and communication platforms are also constantly changing. So it's important that not only products, but also the way we reach consumers, interact with them, adapt to their needs and desires. FNW: How have luxury customers evolved? TB: Today, there's a growing desire on the part of customers for a personal experience. In recent years, the market has always been strongly supported by the higher end of the clientele characterized by great capacity and determination to spend. These are customers who require treatment, service and products with greater uniqueness than those demanded by an entry-level customer who is quite happy to approach the brands through a perfume, a pair of glasses, a scarf, a tie or a belt. FNW: There were problems last year in Italy with suppliers, including Dior's, who had little regard for working conditions. What is your position on this issue? TB: High-quality Italian production is an extraordinary strength for the country and for the luxury goods industry. It's made up of large companies and a fragmented number of SMEs, most of them family-owned. For the most part, these are great companies, but transparency, control and management of this whole ecosystem are sometimes a little difficult. FNW: Did you take any action following the Dior investigation? TB: Last year, we carried out over 5,000 audits, also in reaction to what happened to Dior. We reviewed all our practices, both in terms of supplier and order qualification, and downstream controls. We have improved our practices, which has cost us a great deal of resources and money. We have revised our charter, creating, for example, a reinforced control body to ensure that each brand reviews its own practices against criteria of excellence. The problem is that the system is so fragmented that there are still a few areas of uncertainty where we need to improve. As a reminder, in the case of the Dior investigation, the Italian competition authority ultimately found no infringement, and the Milan court revoked the judicial administration under which Manufactures Dior srl had been placed following the measures taken by the company. FNW: How can we combat the exploitation of workers in the textile sector? TB: I don't think the solution lies with the companies alone. We all need to work together with associations, regional and national authorities, to achieve greater transparency and social sustainability. This will be a process of medium-term transformation and consolidation, in which, I hope, all the strengths of Italian craftsmanship will be maintained.
Fashion Network
2 days ago
- Business
- Fashion Network
LVMH's Toni Belloni: "Values that seemed consolidated for luxury customers are now being called into question"
On the occasion of the inauguration of the new Thélios factory, dedicated to the manufacture of metal eyewear, on July 10 in Longarone, Veneto, the president of LVMH Italy, Antonio (Toni) Belloni talks to about the projects and strategy of the number one luxury brand in the Peninsula, while also discussing the evolution of consumers and the luxury market. How strong is LVMH in Italy? Toni Belloni: The group has six Italian houses (Bulgari, Fendi, Pucci, Loro Piana, Acqua di Parma and Cova cafés, editor's note). It has 280 boutiques and 66 production workshops, employing more than 18,000 people in the country, while employing nearly 100,000 others through its network of more than 4,000 suppliers and subcontractors. The Italian ecosystem offers a particularly favorable context for the development of luxury brands. FNW: LVMH invested heavily in Italy last year. Will it continue to do so? TB: In 2024, we invested around 500 million euros in Italy, as a large number of projects came to fruition over the same period. Previously, we were investing more like 100 million euros, so I don't think we'll be deploying that kind of money again. But it does testify to the fact that the Group is continuing to commit to new, and even major, investments. FNW: What are LVMH's current projects in Italy? TB: For 2026, a new Louis Vuitton workshop dedicated to accessories will be built ex novo in Pontassieve, Tuscany. There's also Loro Piana's major project at Ghemme, in the cashmere district near Novara in Piedmont, which will set up an industrial complex around a historic building, bringing together under one roof its various workshops currently scattered around the valley, as well as other activities. We are also renovating a number of Belmond Group hotels, including the Hotel Cipriani in Venice. In Milan, the three flagships of Louis Vuitton, Bulgari and Tiffany & Co. were opened on Via Montenapoleone, followed by the three new openings on the same street of Fendi, Dior and Celine. FNW: In view of the economic situation, have you reviewed certain investments? TB: Investment projects are medium-term, and cannot be stopped or restarted from one day to the next. At the very least, we can delay the opening of a store for a few months, or postpone certain investments for the long term, but I think that the strategic commitment is to invest. First of all, on the store front. This year, we plan to open at least five of the six major stores I mentioned in Milan. But also in the supply chain, which I think still needs to be strengthened culturally in terms of training, but also from an infrastructure point of view. FNW: Have any of the planned investments been postponed? TB: Our strategic horizon, whether in the retail or industrial sectors, is three to five years. So we have to realize that we're betting on a market that will continue to grow in the medium to long term, while we're more cautious about the next six or even nine months. Clearly, we're not in a glorious market phase. But, as a reminder, the current situation follows a period of almost thirty months, from 2021 to mid-2023, of euphoric growth, which frankly was not sustainable. "We have carried out over 5,000 audits" FNW: How do you cope with this phase? TB: In the medium to long term, the group is making sure that the brands continue to be more desirable. In the short term, there is a management effort, but also an effort to adapt to a customer whose convictions are changing. Values that seemed extremely consolidated for luxury customers, such as the convergence of world cultures and globalization, are now being called into question. Connection and communication platforms are also constantly changing. So it's important that not only products, but also the way we reach consumers, interact with them, adapt to their needs and desires. FNW: How have luxury customers evolved? TB: Today, there's a growing desire on the part of customers for a personal experience. In recent years, the market has always been strongly supported by the higher end of the clientele characterized by great capacity and determination to spend. These are customers who require treatment, service and products with greater uniqueness than those demanded by an entry-level customer who is quite happy to approach the brands through a perfume, a pair of glasses, a scarf, a tie or a belt. FNW: There were problems last year in Italy with suppliers, including Dior's, who had little regard for working conditions. What is your position on this issue? TB: High-quality Italian production is an extraordinary strength for the country and for the luxury goods industry. It's made up of large companies and a fragmented number of SMEs, most of them family-owned. For the most part, these are great companies, but transparency, control and management of this whole ecosystem are sometimes a little difficult. FNW: Did you take any action following the Dior investigation? TB: Last year, we carried out over 5,000 audits, also in reaction to what happened to Dior. We reviewed all our practices, both in terms of supplier and order qualification, and downstream controls. We have improved our practices, which has cost us a great deal of resources and money. We have revised our charter, creating, for example, a reinforced control body to ensure that each brand reviews its own practices against criteria of excellence. The problem is that the system is so fragmented that there are still a few areas of uncertainty where we need to improve. As a reminder, in the case of the Dior investigation, the Italian competition authority ultimately found no infringement, and the Milan court revoked the judicial administration under which Manufactures Dior srl had been placed following the measures taken by the company. FNW: How can we combat the exploitation of workers in the textile sector? TB: I don't think the solution lies with the companies alone. We all need to work together with associations, regional and national authorities, to achieve greater transparency and social sustainability. This will be a process of medium-term transformation and consolidation, in which, I hope, all the strengths of Italian craftsmanship will be maintained.
Fashion Network
3 days ago
- Business
- Fashion Network
LVMH's Toni Belloni: "Values that seemed consolidated for luxury customers are now being called into question"
On the occasion of the inauguration of the new Thélios factory, dedicated to the manufacture of metal eyewear, on July 10 in Longarone, Veneto, the president of LVMH Italy, Antonio (Toni) Belloni talks to about the projects and strategy of the number one luxury brand in the Peninsula, while also discussing the evolution of consumers and the luxury market. How strong is LVMH in Italy? Toni Belloni: The group has six Italian houses (Bulgari, Fendi, Pucci, Loro Piana, Acqua di Parma and Cova cafés, editor's note). It has 280 boutiques and 66 production workshops, employing more than 18,000 people in the country, while employing nearly 100,000 others through its network of more than 4,000 suppliers and subcontractors. The Italian ecosystem offers a particularly favorable context for the development of luxury brands. FNW: LVMH invested heavily in Italy last year. Will it continue to do so? TB: In 2024, we invested around 500 million euros in Italy, as a large number of projects came to fruition over the same period. Previously, we were investing more like 100 million euros, so I don't think we'll be deploying that kind of money again. But it does testify to the fact that the Group is continuing to commit to new, and even major, investments. FNW: What are LVMH's current projects in Italy? TB: For 2026, a new Louis Vuitton workshop dedicated to accessories will be built ex novo in Pontassieve, Tuscany. There's also Loro Piana's major project at Ghemme, in the cashmere district near Novara in Piedmont, which will set up an industrial complex around a historic building, bringing together under one roof its various workshops currently scattered around the valley, as well as other activities. We are also renovating a number of Belmond Group hotels, including the Hotel Cipriani in Venice. In Milan, the three flagships of Louis Vuitton, Bulgari and Tiffany & Co. were opened on Via Montenapoleone, followed by the three new openings on the same street of Fendi, Dior and Celine. FNW: In view of the economic situation, have you reviewed certain investments? TB: Investment projects are medium-term, and cannot be stopped or restarted from one day to the next. At the very least, we can delay the opening of a store for a few months, or postpone certain investments for the long term, but I think that the strategic commitment is to invest. First of all, on the store front. This year, we plan to open at least five of the six major stores I mentioned in Milan. But also in the supply chain, which I think still needs to be strengthened culturally in terms of training, but also from an infrastructure point of view. FNW: Have any of the planned investments been postponed? TB: Our strategic horizon, whether in the retail or industrial sectors, is three to five years. So we have to realize that we're betting on a market that will continue to grow in the medium to long term, while we're more cautious about the next six or even nine months. Clearly, we're not in a glorious market phase. But, as a reminder, the current situation follows a period of almost thirty months, from 2021 to mid-2023, of euphoric growth, which frankly was not sustainable. "We have carried out over 5,000 audits" FNW: How do you cope with this phase? TB: In the medium to long term, the group is making sure that the brands continue to be more desirable. In the short term, there is a management effort, but also an effort to adapt to a customer whose convictions are changing. Values that seemed extremely consolidated for luxury customers, such as the convergence of world cultures and globalization, are now being called into question. Connection and communication platforms are also constantly changing. So it's important that not only products, but also the way we reach consumers, interact with them, adapt to their needs and desires. FNW: How have luxury customers evolved? TB: Today, there's a growing desire on the part of customers for a personal experience. In recent years, the market has always been strongly supported by the higher end of the clientele characterized by great capacity and determination to spend. These are customers who require treatment, service and products with greater uniqueness than those demanded by an entry-level customer who is quite happy to approach the brands through a perfume, a pair of glasses, a scarf, a tie or a belt. FNW: There were problems last year in Italy with suppliers, including Dior's, who had little regard for working conditions. What is your position on this issue? TB: High-quality Italian production is an extraordinary strength for the country and for the luxury goods industry. It's made up of large companies and a fragmented number of SMEs, most of them family-owned. For the most part, these are great companies, but transparency, control and management of this whole ecosystem are sometimes a little difficult. FNW: Did you take any action following the Dior investigation? TB: Last year, we carried out over 5,000 audits, also in reaction to what happened to Dior. We reviewed all our practices, both in terms of supplier and order qualification, and downstream controls. We have improved our practices, which has cost us a great deal of resources and money. We have revised our charter, creating, for example, a reinforced control body to ensure that each brand reviews its own practices against criteria of excellence. The problem is that the system is so fragmented that there are still a few areas of uncertainty where we need to improve. As a reminder, in the case of the Dior investigation, the Italian competition authority ultimately found no infringement, and the Milan court revoked the judicial administration under which Manufactures Dior srl had been placed following the measures taken by the company. FNW: How can we combat the exploitation of workers in the textile sector? TB: I don't think the solution lies with the companies alone. We all need to work together with associations, regional and national authorities, to achieve greater transparency and social sustainability. This will be a process of medium-term transformation and consolidation, in which, I hope, all the strengths of Italian craftsmanship will be maintained.
Fashion Network
21-04-2025
- Business
- Fashion Network
Toni Belloni: "Bulgari is a shining example of LVMH's ongoing commitment to Italy"
Nothing seems to slow down French luxury giant LVMH. The world's leading luxury goods group closed the first quarter of 2025 with revenue reaching €20.3 billion despite the challenging market environment. Under its umbrella, historic Roman jeweler Bulgari inaugurated the expansion of its gold and jewelry manufacturing site in Valenza, a town in Italy's Piedmont region. The site is now the largest jewelry factory in the world. On this occasion, also sat down with Toni Belloni, chairman of LVMH Italy and a senior executive with the group since 2001. "It's an emotional moment for me to be here today because I've followed the Bulgari Maison even before it joined LVMH. I worked closely with the family and Francesco Trapani for many years, and in 2011, I personally led the acquisition project. That was 14 years ago, and since then, the entire team—under the leadership of Jean-Christophe Babin—has accomplished incredible things," Belloni told us. "Perhaps the greatest satisfaction has been building on the legacy created over the last century by so many remarkable individuals while preserving and enhancing the brand's distinct Italian identity. We've supported both the personal and professional growth of many long-time Bulgari employees and kept many of them with us. We're also proud to have created more than 2,000 new jobs. Bulgari is a true testament to LVMH's dedication to Italy." Belloni highlighted that of LVMH's six Italian Maisons, two—Loro Piana and Fendi —are celebrating their 100th anniversaries this year. LVMH currently operates 279 stores in Italy's major cities and 66 production sites across various industrial districts, all known for their excellence. "Our investments continue to grow year after year. Last year, thanks to several favorable factors, we invested €500 million. But the figure that matters most to us is that we have 18,000 people working directly for us. They are the true artisanal heart of our brands," said the Italian executive. "In turn, these brands collaborate with more than 4,000 companies, most of them small and medium-sized businesses with product expertise and know-how that are invaluable to our industry and to Italy. I would say this commitment is even more important now, at a time when the market is uncertain and increasingly competitive." Belloni expressed continued optimism, saying he remains "firmly confident" in Italy's national system's medium- and long-term prospects. "That's the horizon we work within—it guides our strategy, shapes our investment planning, and defines the value of what we do. The luxury market will grow again," he said confidently. "Our brands will continue to stand out with distinctive features, innovative products, and fresh ideas that excite customers worldwide. I have the same level of confidence in Italy. I truly believe it will remain an ideal environment for strengthening luxury businesses." Toni Belloni also pointed to Italy's deep-rooted artistic and cultural education and appreciation for craftsmanship. "It's a mindset that goes back centuries, born out of Renaissance guilds," he said. "Today, in Italy's industrial districts, we find a natural inclination for creativity, flexibility, and human connection—elements that make it a truly unmatched system of beauty." He added, "Together with institutions, schools, families, professional associations, and especially the younger generations, we must continue working to make this system more efficient, more flexible, and better equipped to stand against global competition." "We play a leadership role in this ecosystem," Belloni added. "The expansion of Valenza clearly demonstrates the strong commitment LVMH continues to make." He also highlighted the group's ongoing retail development projects in Italy. "Between last week and this one, we've opened three stores on Via Montenapoleone in Milan—one each for Bulgari, Louis Vuitton, and Tiffany. In the coming months, we'll open two more for Dior and Fendi, which are also on the same street. On top of that, we're investing in multi-year renovations of three iconic hotels: the Timeo in Taormina, the Splendido in Portofino, and the Cipriani in Venice—each a jewel of Italian lifestyle."
