LVMH-owned luxury fashion house Loro Piana has been placed under judicial administration for one year by a Milan court amid allegations of labor exploitation in its Italian supply chain, according to a report by Reuters.
Loro Piana becomes the fifth luxury label since last year to face this kind of controversy, following similar cases with Dior, Valentino, Armani, and Alviero Martini.
The court found that Loro Piana “culpably failed” to monitor its subcontractors, allowing labor violations through indirect suppliers.
An investigation by Italy’s Carabinieri labor protection unit revealed that one of the workshops employed 10 Chinese workers, including five undocumented individuals, who were allegedly forced to work up to 90 hours per week, paid just EUR4 per hour ($4.6) and housed illegally on-site.
The case came to light after a worker reported being physically assaulted over unpaid wages. Authorities subsequently arrested the workshop owner and shut down the facility.
While Loro Piana is not the subject of a criminal investigation, the court appointed an external administrator to supervise reforms to the brand’s supply chain oversight.
The administration could be lifted early if the company demonstrates substantial progress – a provision granted in similar cases involving Dior and Armani.
In a statement cited by Reuters, Loro Piana said the violations were the result of unauthorized subcontracting.
The company was found to have outsourced work via two front companies to Chinese-owned workshops in Milan that had no actual manufacturing capacity, Reuters reported after reviewing court documents.
“We terminated our relationship with the supplier in May and continue to strengthen our control and audit activities to ensure compliance with our ethical and quality standards,” the company said.
Known globally for its luxury cashmere and wool products, Loro Piana was acquired by LVMH in 2013, with the founding family retaining a 20 per cent stake.
In June, Frederic Arnault, son of LVMH chairman and CEO Bernard Arnault, was appointed CEO of the company.
