LVMH Labour Scandal Highlights Urgent Need for Supply Chain Transparency

A Milan court has placed Loro Piana, the Italian cashmere label majority‑owned by LVMH, under judicial administration for one year, following findings of severe labour exploitation within its supply chain reports The Business of Fashion.

Italian authorities revealed that Chinese‑owned workshops in Italy, used by intermediaries, employed workers—some undocumented—for up to 90 hours a week, paid around €4/hour, and housed them in unsanitary, dormitory conditions inside factories. One worker reportedly suffered a month-long hospitalisation after being physically assaulted for requesting unpaid wages—a shocking indicator of the abuse uncovered.

This marks the fifth luxury brand—to face such measures since 2023. The court found Loro Piana “culpably failed” to properly oversee its subcontractors, prioritising profits over due diligence. Italian police closed two Chinese-run factories and fined the entities involved over €240,000.

These cases underscore a stark truth: all retailers urgently need transparent supply‑chain traceability. For the past eight years, Fashion‑Enter Ltd / FashionCapital has invested in full oversight via Galaxius—a system providing real‑time, cloud‑based visibility into who makes what, when, and at what wage. This approach eliminates any possibility of unauthorised subcontracting or exploitative practices.

With luxury scandals proliferating—from labour abuse to counterfeit scares—consumers are demanding real transparency. A renewed focus on UK-based production, known for its heritage and traceability, offers a powerful response. Retailers must act now: adopting ethical, fully traceable manufacturing, or risk both reputational and legal consequences in today’s climate.

How Galaxius provides total transparency:

• Real-time cloud oversight: instantly verify operator activity, wages, and production stages.
• Absolute subcontract control: no risk of hidden chains or rogue workshops.
• Consumer trust earned: transparent sourcing appeals to ethical-value buyers.
• Regulatory and reputational defence: avoid fines, administration orders, and global headlines.

The Loro Piana case in Milan is a wake-up call. Until all retailers adopt transparent traceability solutions—like those FEL has established and championed—labour abuses will persist, and the luxury sector’s credibility will suffer.

FEL CEO Jenny Holloway commented: “It is actually pitiful that the luxury market has been hit by a series of scandals, from labour exploitation to fake viral stories about luxury goods being made in China alongside fake goods. One of the workers at the factories allegedly told police he had been hospitalised for over a month after being beaten for asking for his Chinese bosses for unpaid wages. Hospitalised – for asking for wages! This is shambolic! 

“More and more consumers want traceability and there’s a real return to making in the UK where there’s heritage and full transparency. Retailers – it really is time to look at ethical production in the UK!”