A Milanese court has terminated the special administration of LVMH's Italian subsidiary, Manufactures Dior, ahead of schedule.
The measure was imposed in June 2024 due to allegations of labour exploitation linked to the production of Dior handbags.
The court mandated a one-year oversight period after investigations suggested that Manufactures Dior outsourced work to Chinese-owned companies accused of mistreating employees.
Since then, the subsidiary has overhauled its organisational structure and supplier monitoring processes to meet the court's requirements.
Reuters quoted the judges: "In detail, the fashion house resolved relationships with 'at-risk' suppliers extremely quickly and also developed several best practices that received court approval."
The latest development concludes the Milan court's revocation of all three special administrations it had instituted on fashion brands in 2024, which also affected Alviero Martini and an Armani unit.
Dior stated: "Dior firmly reaffirms its commitment to protecting and applying the core values of transparency, integrity and respect throughout the supply chain.”
The June ruling detailed that Manufactures Dior subcontracted bag production to four small suppliers employing 32 workers, among whom were illegal immigrants and others lacking proper documentation.
The court highlighted substandard working and living conditions at the time.
Reuters quoted the court in late February 2024: "The company showed a deep understanding of the rationale behind the measure, and saw this as an opportunity to strengthen and implement internal checks, aimed at avoiding a repetition of similar events."
Recent investigations by Italian magistrates, particularly from the Milan prosecutor's office, have revealed alleged worker exploitation within the fashion and luxury sector supply chains.
Consequently, Milan's Court of Justice recommended a national initiative urging luxury brands to intensify supplier vetting to ensure adherence to labour regulations.
"Italian court ends oversight of LVMH’s Dior unit amid labour inquiry " was originally created and published by Retail Insight Network, a GlobalData owned brand.
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