Investigation Unveils Dior’s $2800 Bags Cost $57 to Produce: Raids Expose Exploited Workers in Italy

Dior- Investigation Findings

• Luxury Handbag Production: Raids revealed exploited workers in factories making luxury handbags for high-end brands like Dior and Armani.
• Working Conditions: Workers endured menial conditions, often sleeping at factories to ensure round-the-clock manpower.
• Production Costs vs. Retail Prices:
• Dior Bags: Retail for upwards of $2800 (approx. INR 2 lakh), but production costs were a mere $57.
• Armani Bags: Retail for over $1900 globally, but production costs were $99.

Legal and Ethical Violations

• Dior’s Italian Subsidiary: Subcontracted work to Chinese-owned firms exploiting workers.
• Court Administration: Dior’s Italian operations have been placed under court administration following the investigation.
• Worker Documentation:
• Illegal Immigrants: Two staff members entered Italy illegally.
• Improper Documentation: Seven staff members worked without proper documentation.
• Health and Safety: Workers faced below-minimum health and hygiene conditions.
• Production Cycles: Facilities had unbridled day and night production, even during holidays, with safety devices removed from machinery for faster operations.

Court Criticism and Impact

• Brands Criticized: Milan court criticized Dior and Armani for failing to oversee their supply chains adequately.
• LVMH Shares: LVMH shares dropped by 2.2% following the news.
• Contractor Accountability: While Dior itself is not under criminal investigation, the contractors are being scrutinized.

Broader Implications

• Supply Chain Oversight: The investigation highlights the need for luxury brands to ensure ethical practices in their supply chains.
• Ethical Standards: The findings stress the importance of maintaining health, safety, and legal standards for workers in all parts of the production process.

For more updates check out our Instagram handle.