The luxury powerhouse, known as Dior, has been at epicentre of mass scrutiny since Italian authorities uncovered sweatshops producing their products. It was uncovered that a $2,800 Dior bag only costs the company a whopping $57 to produce. The glaring difference between the glitzy façade of Milan's fashion industry and the brutal realities of producing luxury items has been revealed by a series of raids in Italy.
This raises the question; how far a brand’s image and trademark can carry them when their products are sub-par? The answer is quite shocking to say the least.
Most consumers justify the prices of these goods by the luxurious quality that is advertised, being that of the highest handmade skill and material. Meanwhile, the real product is being produced in the same circumstances as the dupes.
The most valuable asset of premium brands Dior and Armani is at risk, namely their brand image.
The Competition Authority of Italy announced that it was looking into the possibility that Dior and Armani deceived customers by claiming to be ethical and well-made brands.
Since the matter was initially brought to light by an investigation into worker exploitation, Louis Vuitton and Moët Hennessy (“LVMH”) has been under increasing pressure to confront it.
It said that the LVMH are under investigation for potentially breaking Italy's Consumer Code by marketing and selling clothing and accessories in violation of competition law. Penalties for violating the code may reach an excess of €10 million. Moving forward, more luxury fashion houses are set to be investigated for unfair labour practices.
Last month, LVMH was placed under judicial administration in Milan for allegedly sending work to Chinese-owned companies that abused it’s employees.
In many instances, labourers are compelled to put in extended shifts with subpar health and safety provisions. These conditions resemble stereotypical sweatshops. In some instances, workers were found to be sleeping at factories to ensure production deadlines were met. In some circumstances emergency signs have been removed from factories, violating various safety photocalls.
Is the death of luxury powerhouses on the horizon? Since the houses selling products at extortionate prices are being accused of the same crimes as fast fashion brands like Shein, one is begged the question as to what will happen when an industry which relies on it's identity, luxury, and brand name falls into disrepute.
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