Italian authorities: Expensive Dior and Armani bags sold for $57 | Mixed


A series of raids in Italy have exposed the contradictions between the world of Milan's high fashion shows and some of the realities of luxury goods production. An investigation by Milan prosecutors into working conditions at local factories has found that luxury goods makers such as Dior and Armani hired contractors who were paid at least $2 an hour to produce handbags that were then sold for thousands of dollars each, according to European law enforcement officials.

Dior, the French multinational luxury fashion company led by tycoon Bernard Arnault and his family, paid suppliers about $57 to make a handbag that sold in stores for about $2,780, The Wall Street Journal reported.

Giorgio Armani women's bag Image source: company website
Giorgio Armani women's bag (Source: company website)

Milanese designer Armani paid suppliers $270 to make the bags, which were then retailed for just under $2,000.

Contractors employed by luxury fashion brands such as Dior pay undocumented migrants low wages, the report shows. Italian authorities released the figures after raiding workshops and makeshift factories that employed irregular migrants and others “outside the scope of the law.”

Milan prosecutors accused the companies of hiring subcontractors who paid Chinese migrants and other foreign workers $2 to $3 an hour. The workers allegedly slept in the workshops and were forced to work from dusk to dawn, including holidays and weekends.

Dior women's bag Source: Company website
Dior women's bag (Source: company website)

Last month, an Italian judge ordered subsidiaries of Dior, Armani and Alviero Martini SpA to be placed under court management because of abuses of migrant workers at the companies’ manufacturing units.

For its part, Armani, which outsources its production to in-house production company GA Operations, has yet to respond officially. In response to the raids, the global fashion house denied any wrongdoing by GA Operations, which makes clothing, accessories and home furnishings for the Giorgio Armani Group brands.

Police said GA Operations hired a subcontractor, which in turn hired unlicensed Chinese contractors to illegally employ workers. They allegedly ignored health and safety regulations and rules on working hours, holidays and vacations. Police explained that this was part of a system of “caporalato,” which is the illegal mediation and exploitation of workers usually associated with the agricultural sector.

Four Chinese factory owners face separate criminal investigations for their roles in the case. Lt. Col. Loris Baldassarre of the Carabinieri said GA’s operations were not under investigation but had been placed under judicial management for a year as part of measures to ensure it operated legally.

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