Milan: In a significant development, an Italian court has placed under judicial administration a company owned by the esteemed Italian fashion conglomerate Armani. The move comes in the wake of allegations suggesting the indirect subcontracting of production to Chinese companies, reportedly engaged in labor exploitation practices.
According to the ruling obtained by Reuters, the court in Milan has mandated a one-year receivership for Giorgio Armani Operations, identified as an industrial entity within the Armani Group. The court’s decision highlights concerns over the outsourcing of bag production, purportedly entrusted by Giorgio Armani Operations to two firms, subsequently subcontracted to four Chinese companies. Shockingly, these companies are alleged to have compensated their workers with mere hourly wages ranging from 2 to 3 euros ($3.25).
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In response to these troubling revelations, the Armani Group issued a statement affirming its commitment to combatting abuses within the supply chain. The statement underscored the implementation of rigorous control and prevention measures aimed at mitigating such exploitation. The fashion powerhouse expressed its willingness to collaborate with authorities in addressing the matter and clarifying its stance.
The ongoing investigation by the Milan public prosecutors’ office sheds light on longstanding concerns regarding the outsourcing practices of major fashion and industrial players. Instances of alleged worker exploitation by subcontractors have drawn increased scrutiny, with the recent placement of the fashion company Alviero Martini under judicial supervision serving as a pertinent example.
Italy’s rich heritage of artisanal craftsmanship has positioned it as a global leader in the luxury clothing and leather goods sector. However, the reliance on subcontractors, particularly in regions such as China, has raised ethical and legal questions surrounding labor practices. Despite Italy’s dominance, approximately 50-55% of luxury clothing and leather goods production is attributed to small manufacturers within the country, as per consultancy Bain’s estimates.
