Dior Unit Put Under Court Administration in Italy Over Labour Exploitation

A Milan court has appointed a commissioner to run an Italian unit of French fashion group Christian Dior after an inquiry alleged it had sub-contracted work to Chinese companies that exploited workers, a document showed.

The court ordered Manufacturers Dior SRL be placed under judicial administration for one year, a copy of the ruling seen by Reuters showed on Monday.

The decision follows a similar move in April by the same court which placed under administration a company linked to fashion group Armani for “culpably failing” to adequately oversee its supply chain following a labour exploitation probe.

Dior is the second largest fashion label owned by French luxury giant LVMH. Christian Dior SE is a separate, listed holding company controlled by France’s Arnault family, which holds a 42 percent stake in LVMH.

Late last year an Italian bag manufacturer became the first fashion company to be placed under special administration by the Milan court in charge of pre-emptive measures.

The Dior investigation focused on four Chinese suppliers employing 32 workers, two of whom were illegal immigrants and seven were working without required documentation.

The staff appeared to sleep in the work place “in hygienic and health conditions below what an ethical approach would require,” the document said.

The Dior unit did not adopt “appropriate measures to verify the actual working conditions or the technical capabilities of the contracting companies,” it added.

A representative for LVMH could not immediately be reached for comment.

The Armani probe also unveiled that suppliers of the Italian fashion brand included Chinese manufacturers that violated work protection laws. Armani Group said at the time it had always sought to “minimise abuses in the supply chain.”

By Emilio Parodi, writing by Valentina Za, editing by Gavin Jones

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