Italian Court Takes Action Against Armani Subsidiary Over Labor Exploitation Allegations

Italian Court Takes Action Against Armani Subsidiary Over Labor Exploitation Allegations

An Italian court has placed Giorgio Armani Operations, part of the Armani Group, under judicial administration for a year due to allegations of indirectly outsourcing production to Chinese companies involved in worker exploitation.

On Friday, an Italian court took action against a company within the Armani fashion empire, alleging it indirectly outsourced production to Chinese entities accused of exploiting labor.

The Milan court imposed a one-year judicial administration on Giorgio Armani Operations, identified as a key industrial segment of the Armani Group, based on the court documents reviewed by Reuters.

Italian Court Takes Action Against Armani Subsidiary Over Labor Exploitation Allegations

The court’s decision highlighted that Giorgio Armani Operations had delegated the manufacture of its handbags to two companies, which in turn subcontracted the work to four Chinese firms.

These firms were reported to compensate their employees with wages between 2 and 3 euros per hour.

In response, the Armani Group issued a statement emphasizing its longstanding commitment to overseeing and implementing measures aimed at curtailing malpractices within its supply chain. The company also expressed its intention to cooperate fully with the relevant authorities to elucidate its stance.

This judicial move comes as part of a broader investigation by the Milan public prosecutors’ office into the practice of major brands in the fashion industry and beyond, outsourcing their production to subcontractors implicated in labor exploitation.

The case follows a similar situation involving the fashion brand Alviero Martini, which found itself under judicial oversight due to its handbags being manufactured by external Chinese workshops.

Italy, renowned for its high-quality craftsmanship, hosts an extensive network of small-scale manufacturers. These entities are responsible for producing between 50-55% of the world’s luxury clothing and leather goods, as estimated by consultancy Bain. This compares to 20-25% manufactured in the rest of Europe, showcasing Italy’s pivotal role in the luxury goods sector.

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