Lux Brands Dior, Armani Under Scanner For Supply Chain Malpractices  

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Lux Brands Dior, Armani Under Scanner For Supply Chain Malpractices  

| Updated: July 5, 2024 17:55

Luxury fashion brands Dior and Armani are under the scanner concerning wrong practices related to their supply chains like handling of suppliers and pricing strategies. 

An investigation has revealed that Dior, a renowned luxury brand, pays its suppliers a mere 53 euros (approximately Rs 4,700) per handbag. Shockingly, these same handbags are then sold in Dior stores for a staggering 2,600 euros (about Rs 2.34 lakh). The substantial markup has raised eyebrows and drawn criticism from prosecutors who accuse the company of inadequate oversight. 

Armani, another prominent luxury label, faces similar allegations. Bags initially purchased from suppliers for 93 euros (around Rs 8,400) are resold to the brand for 250 euros (approximately Rs 22,500). These bags are subsequently priced at approximately 1,800 euros (about Rs 1.6 lakh) in Armani stores. Notably, these figures exclude material costs such as leather, which are covered separately for design, distribution, and marketing. 

While Dior and Armani themselves do not face charges directly, independently owned suppliers could be held accountable for exploiting workers. Some suppliers allegedly employ individuals without proper documentation, including at least two illegal immigrants and seven off-the-books employees. Authorities are closely monitoring these practices. 

Italian police inspections conducted in March and April revealed shocking working conditions. Employees were subjected to subpar hygiene and health standards, falling below ethical norms. Additionally, safety devices on machines were reportedly removed to boost productivity, compromising worker safety. These staff members often worked long hours, including weekends and holidays, and lived on-site. 

Dior, owned by luxury conglomerate LVMH, has remained silent on the matter. In contrast, Armani has asserted that it implements control and prevention measures to minimise abuses within its supply chain. The brand claims to collaborate transparently with authorities to address any concerns raised.

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