Antoine Arnault and Wang Wei do not know each other. And in all likelihood they will never meet. One is French, lives in Paris and has a 19 million euro villa in Saint-Tropez. The other is Chinese, he works and sleeps in a shed on the outskirts of Milan. Still, the two have one thing in common: the fashion brand Their Piana, now in controlled administration.
A president and a worker, inside the same brand
The first is the son of Bernard, the dominus of the French luxury maxi-poro Lvmh, who has ninety pieces such as Louis Vuitton, Fendi, Bulgari in portfolio and, precisely, the Italian cashmere group of which Antoine is president. The second works instead for the Clover Fashion of Hu Xizhai, a company to which the historic fashion house is subcontracting the tailoring works. Wang works 13 hours a day, from 9 in the morning to 10 pm in the evening. He only has half an hour of lunch break and half an hour for dinner. When in April he reported it to the superior, he claims to have received a handful in the face and a beating in the head with a plastic tube. It is thanks to its complaint if in early May the carabinieri protection nucleus decided to visit Baranzate’s sheds. Wang had warned them: Hu would have given the employees to escape if foreign people other than the usual customers had been presented in the company. But the advice is not enough. And they were discovered.
A global story of exploitation in luxury
Wang’s story seems to be one of the many that characterizes this universe. Not only in Italy, but all over the world. For years, luxury houses have in fact seemed to play replacement with transparency when it comes to providing information on their supply and production chains. “The cases that gradually come to the surface and the problems they reveal are structural and are deeply rooted in the Italian and international fashion system”, explains to Panorama Deborah Lucchetti, national coordinator of the countryside clean clothes, section of the internaration of Clean Clothes Campaign. A modus operandi that seems difficult to change. «From our investigations it does not appear that any brand has, for example, implemented commercial policies capable of guaranteeing all workers and workers of the supply chain a minimum dignified salary. Without the safety of a just wage and the guarantee of respect for fundamental rights, starting from that of freedom of association, no change is possible and any ethical protocol remains a formal exercise ».
The Milan prosecutor and the side that does not parade
The Milan prosecutor’s office, with the prosecutor Paolo Storari, has been carrying out a battle for more than a year that has forced many companies to put thousands of employees in order and pay hundreds of millions of euros per tax authorities. It is the other face of fashion. The one that does not parade. The one it produces. The one that uses. At the center are the great luxury brands, some of which represent the excellence of Made in Italy, such as Alviero Martini, Giorgio Armani, Loro Piana, Valentino and Dior. In the background, irregular occupation, clandestinity, the systematic circumvention of work rules. And above all, a practice: to produce the lower cost possible, even at the price of human dignity, except to sell at exorbitant prices.
The subcontracting mechanism and the Chinese scheme
The investigations conducted by the Inspectorate of the Labor of the Carabinieri brought out a recurring and structured scheme. The big brands, through contract contracts, entrust production to companies formally equipped with production means, but which in reality do not have real industrial ability. In turn, these companies subcontract the work to Chinese opens, where irregular workers are used, often in conditions at the limit of slavery. At the center of the accusations are various cases of exploitation and corporal, nothing more than the illicit recruitment of people with the aim of exploiting them.
Rotation of workers, direct orders and awareness
The same tailors pass from one laboratory to another, with exhausting shifts and hunger fees. In multiple cases, the conductors of these laboratories recruit clandestine compatriots, without alternatives. Not only that: they are themselves receiving operating instructions directly from the contracting companies, a sign that fashion houses are often aware of the origin of their workforce. Investigations can serve to change something, but then it is also up to the legislator to intervene. According to Lucchetti: “Binding rules are needed to oblige companies to respect rules and rights along the entire supply chain, as the directive on due diligence approved last year by the European Parliament wants”. Too bad, however, that “the directive is now under attack by the European institutions themselves who have approved it; With the Omnibus package behind the flag of competitiveness and simplification, the European Commission wants to totally empty it of effectiveness, “explains Lucchetti.
Two euros per hour for a jacket sold for three thousand
To give an order of magnitude, according to the last investigation, the clandestine labor in some cases was paid with 2-3 euros per hour. A jacket made in these conditions can be resold at ten, twenty, fifty times higher prices. Their plain defends himself and in a note he says he condemns “firmly any illegal practice and reaffirms his continuous commitment in the protection of human rights and in complying all the regulations in force along the entire production chain”. On the other hand, how much is a high fashion jacket? On the market it can exceed 3 thousand euros, but for those who physically produce it its value stop under the ninety. Browsing the operating margins documented by them plain, Armani, Dior and Alviero Martini emerge figures that reflect the dark side of luxury.
The investigation and the margins of profit at poor work
In the case of their plain, one of the suppliers explained to the investigators how the scheme worked. And above all how long had it been going on. “I started producing plain for them since the year 2000 and at the beginning we produced 200 jackets per season. Then the orders increased up to 3 thousand jackets per season ». And then: «The agreed cost was 118 euros per jacket for orders over 100 garments, 128 if lower; I paid 80 euros without a cut to Chinese companies, 86 euros with cut, with oscillations of 5–10 euros ». This means that between the price recognized by the client (via Intermediari) and the cost of subcontractors, a gross margin between 30 and 48 euros per head was generated, depending on the processes. “Also precise,” added one of the suppliers to the investigators “that emissaries of their plain have come to my company several times to make checks on the production, which I deliver to you”.
The annual margin and the compression of the rights
Applied to annual volumes that varied between 6 thousand and 7 thousand jackets (reduced to about 2 thousand in the spring-summer 2025 season), this mechanism produced total margins around 210 thousand euros per year in the periods of full activity. A profit that, according to the investigators, was obtained largely by compressing the rights of the workers employed in production. In the Chinese subcontracting workshops, in fact, a tailor like Wang perceived 1,500 euros per month working 13 hours a day, without replying weekly. The actual remuneration was thus less than 4 euros per hour, with dormitories annexed to the work spaces, in conditions described as seriously harmful to dignity.
Dior, Lvmh and profit beyond rights
A similar dynamic also emerges in the case of Dior. According to the documents, it is a “practice inserted in a business policy exclusively directed to the increase in profit”, in which the maison – despite knowing the supply chain via audit – would have tolerated practices that allowed to keep a margin of 30 -40 euros per head thanks to the cutting of the costs at work. Jacket after jacket, garments produced at 80–90 euros, taking advantage of underpaid labor, arrive in boutiques at prices between one thousand and 2 thousand euros. Once the marketing, distribution and logistics costs are covered, it is clear that a substantial part of the value generated along the supply chain derives directly from the exploitation.
Billionaires and opaque chains
On the financial level, these margins fit into contexts of large performances. Their plain, controlled by LVMH, would have exceeded the threshold of 2–3 billion euros (these are the estimates) of turnover in 2024, with the 2023 report which has already marked revenues over 1.2 billion. Armani Group recorded net revenues for 2.3 billion euros in 2024, down 5 percent in constant changes, with 398 million Ebitda, downhill of 24 percent compared to the 523 million of the previous year. For the LVMH group, which includes Dior and Loro Piana, 2024 ends with revenues for 84.7 billion euros, a 2 percent drop compared to 2023, and a “profit from recurring operations” of 19.6 billion, with an operating margin of 23.1 percent.
Profits that arise from exploitation
Compare these numbers with the margins at clandestine work clarifies how the exploitation, structural and tolerated, directly the financial results: millions of profits arise from the compression of the cost of labor in opaque supply chains, revealing how luxury can still count on an accounting that ignores rights.
The business culture in the sights of justice
In the case of Alviero Martini Spa, commissioned in January last year, the decree spoke of a “illegal practice so rooted by being part of a business policy aimed at increasing business”. The court underlined that the company could not ignore: “There is a seriously deficit business culture on the minimum control of the production chain”.
The same evaluation emerged for Giorgio Armani Operations Spa, also in 2024. The Prosecutor highlighted how outsourced production activities were entrusted to subjects who use irregular labor. And he underlined the absence of real checks by the parent company: “In Giorgio Armani Operations there is a deficit business culture (…) illegal practice so rooted as to be considered part of the company policy”. Both companies have finished the commissioner phase.
The case Dior and the normalization of illegality
The painting is also similar for Dior Srl Manufacture, controlled by LVMH and finished on the tables of justice last February. The court speaks once again of “illegal practice so rooted by being part of a business policy exclusively aimed at profit”. The illegal practices, according to the judges, “are accepted and in some way promoted, as they are considered normal”.
