Crisis in the fashion world: Receivers appointed to two firms

A series of raids in Italy has laid bare the realities behind the glamorous world of the Milan runways.

According to an investigation conducted by Milan prosecutors into working conditions at local factories, it was revealed that workshops producing handbags and other leather goods for Dior and Armani used low-wage foreign labor to manufacture high-quality products at a fraction of their retail prices.

Furthermore, the Armani investigation uncovered that Chinese manufacturers in Italy were violating labor protection laws.

Following the investigations, receivers were appointed to the Italian production operations of these world-renowned brands.

THE TRUTH BEHIND LUXURY GOODS

The court ruling issued for Dior and Armani stated that workers were forced to sleep at the workplace in order to be "worked for 24 hours a day."

Electricity consumption data revealed "uninterrupted day-and-night production cycles, including on holidays." It was also discovered that safety devices on machines had been removed so that workers could operate them faster.

The court ruling noted that workers were subjected to "hygiene and health conditions below the minimum level."

PRODUCING AT EXTREMELY LOW COSTS

Production costs were reduced through such illegal methods. Accordingly, while each Dior bag was produced for a low cost of 53 Euros (approximately 1,802 TL), these bags were later sold in stores for 2,600 Euros (approximately 91,000 TL).

Production costs do not include leather or other raw materials. Companies also cover design, distribution, and marketing expenses separately.

Italy is home to thousands of small manufacturers that account for 50-55 percent of global luxury goods production. According to the inspections, these manufacturers employ undocumented immigrant workers under very poor conditions.

With the appointment of receivers, the aim is to audit the brands' production processes and improve working conditions.

News Source: 12punto