On July 14, Loro Piana, the high-end cashmere brand, was placed under court-appointed administration for one year by a Milan court due to allegations of labor exploitation within its supply chain.
Loro Piana is a heritage brand, 80% of which was acquired by the LVMH Group in 2013, with the remaining 20% still held by the founding family. In recent years, the brand has been recognized for its efforts toward environmental preservation and sustainability. However, this latest ruling underscores the persistent structural weaknesses within Italy’s fashion supply chains and signals continued regulatory pressure from Italian authorities.
According to the court, Loro Piana subcontracted parts of its production through two intermediary firms that lacked manufacturing capacity, ultimately assigning the work to workshops in Italy operated by Chinese business owners. These facilities are reported to have subjected workers to harsh conditions and severe violations of labor rights.
The court ruling stated that Loro Piana culpably failed to properly monitor its suppliers in order to pursue higher profits.
As a result, the court appointed an external administrator to oversee the company’s operations and ensure compliance with legal obligations for up to one year. Depending on the progress and effectiveness of corrective measures, the supervision period may be shortened.
However, Loro Piana is far from the only brand facing such scrutiny. Earlier this year, Valentino Bags Lab Srl, a company producing bags and accessories for Valentino SpA, was also placed under judicial administration by the Milan court due to alleged labor law violations.
Although the facility was officially recognized as a legitimate supplier to Valentino, investigations revealed widespread subcontracting under abusive conditions. Authorities found large numbers of unregistered or undocumented workers who were reportedly forced to work around the clock, including on holidays.
Since 2023, other major fashion houses such as Christian Dior, Giorgio Armani, and Alviero Martini have also faced similar court-ordered oversight, highlighting the scale and persistence of the problem.
Prosecutors described this practice as a “generalized and consolidated manufacturing method.” Many manufacturers in Italy operate as small, private workshops that fall outside the effective reach of labor inspections, making regulatory enforcement difficult.
Estimates by consulting firm Bain & Company suggest that these small-scale manufacturers are responsible for producing 50–55% of the world’s luxury goods—a figure that underscores the global impact of the issue.
The court also referenced a pact signed in May 2025 between fashion brands and Italian authorities aimed at eradicating labor exploitation. It emphasized that “this production chain, headed by Loro Piana, has continued to operate until now,” indicating insufficient progress.
At present, those under criminal investigation are the owners of the contracting and subcontracting firms. Loro Piana itself is not subject to any criminal charges. However, the case has intensified scrutiny of LVMH’s broader ESG (Environmental, Social, and Governance) practices across its brand portfolio.
Both Loro Piana and its parent company, LVMH, have declined to comment as of the time of this report.
The spotlight now turns to the court-appointed administrator’s findings and how swiftly Loro Piana can implement effective reforms. If the company follows the example of Dior and Armani, which had their oversight lifted early after making improvements, it may be able to exit administration ahead of schedule. However, if similar violations surface at other LVMH-owned brands, the group could face growing reputational risks and mounting pressure from investors.
What luxury brands need today is no longer a CSR report filled with polished rhetoric. The real question is whether they have the will—and the accountability—to look to the far ends of their supply chains and embody what it truly means to create value.
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