Loro Piana, the luxury cashmere label owned by LVMH, has become the fifth high-end fashion brand in Italy to be placed under judicial administration amid an ongoing investigation into labour abuses in the luxury supply chain.

According to a 26-page court ruling reviewed by Reuters, Loro Piana Spa will be subject to judicial monitoring for one year. The decision follows a broader probe launched in 2023 targeting subcontracting practices in Italy’s luxury sector, which has increasingly come under scrutiny for alleged exploitation of workers.

Other brands placed under similar oversight include Valentino, Dior (LVMH’s second-largest brand), Giorgio Armani, and handbag maker Alviero Martini.

The Court of Milan found that Loro Piana, which is known for its high-end cashmere garments, outsourced production through two shell companies that had no manufacturing capacity. These firms, in turn, subcontracted work to Chinese-owned workshops operating in Italy, where workers were allegedly exploited.

LVMH, the world’s largest luxury group, acquired an 80% stake in Loro Piana in 2013, with the founding Italian family retaining 20%. Last month, Frederic Arnault, son of LVMH chairman and CEO Bernard Arnault, was appointed CEO of Loro Piana.

The court found that Loro Piana had “culpably failed” to properly monitor its supply chain, choosing instead to prioritise cost-cutting and profit maximisation at the expense of labour oversight.

Neither Loro Piana nor LVMH have issued public comments on the ruling. While the contracting and subcontracting companies are being investigated by Milan prosecutors for worker exploitation and employing unregistered labour, Loro Piana Spa itself is not facing criminal charges.

In its ruling, the Milan court cited a pattern across the luxury sector, stating that “complete outsourcing of industrial production processes is aimed exclusively at reducing labour costs,” while also avoiding potential legal liability related to worker safety.

The court concluded that such practices were part of a “generalised and consolidated manufacturing method” used widely by fashion houses in Italy’s luxury market.

Faridah Abdulkadiri

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