ALBAWABA - Documents from a thorough audit of subcontractors reveal that LVMH-owned luxury fashion firm Dior was only paying an amount as little as $57 to make handbags that sell for thousands of dollars.
In recent months, Milan prosecutors in Italy looked into Dior, an LVMH company, exploitation of third-party subcontractors, according to Business Insider. Prosecutors said that these businesses took advantage of their employees in order to produce bags at much lower rates compared to retail prices.
Last month, LVMH was placed under judicial administration in Milan for allegedly outsourcing labor to Chinese-owned companies that abused its employees. According to a decision document that Reuters saw, workers were sleeping at the workplaces in order to have "manpower available 24 hours a day."
Dior is reportedly not the only guilty brand as the authorities also conducted an investigation into the manufacturers of Giorgio Armani and discovered that the business paid $99 for bags that were sold in stores for an excess of $1,900, The Street reports.
Reuters quoted court records stating that “it is not something sporadic that concerns single production lots, but a generalized and consolidated manufacturing method,” with Fabio Roia, president of Milan Court saying “The main problem is obviously people being mistreated: applying labor laws, so health and safety, hours, pay.”
Bernard Arnault, CEO of LVMH, ranks as the third wealthiest individual globally, boasting an estimated net worth of $201 billion as per the Bloomberg Billionaires Index. His daughter, Delphine Arnault, is now serving as the Chief Executive Officer of Dior.
