LVMH’s Italian subsidiary has been pulled into a probe involving worker exploitation practices. The French luxury company’s unit making Dior bags has allegedly been handing work to Chinese-owned firms that mistreat workers. Inspections on-site and an overview on electricity usage data led prosecutors to allege workers were employed for extended hours, often into the night and on holidays as well.
The investigation also looked at four suppliers who were based near Milan and employed 32 people, of whom two were illegal immigrants while seven others lacked sufficient documentation. This lead to a Milan court ordering Manufactures Dior S.R.L to be placed under judicial administration for one year, reports Reuters.
This is the third such decision this year by the Milan court, which is in charge of pre-emptive measures. In April, the court took similar steps in relation to a company owned by Giorgio Armani due to accusations the fashion group was quite obviously failing to properly oversee its suppliers.
Neither LVMH nor Armani are under investigation, while the suppliers targeted by the probe face accusations of worker exploitation, according to copies of the court decisions seen by Reuters.
