Loro Piana: Why the LVMH-owned company headed by Bernard Arnault's son is placed under "judicial administration" in Italy

A complaint by a Chinese worker who was beaten by his boss for demanding payment of his back wages led to an investigation in Italy in May 2025. The person behind the lawsuits made items for the Italian fashion house Loro Piana, owned by the French luxury giant LVMH .

According to the evidence found on site by investigators, the Loro Piana cashmere jackets were made "for nearly a hundred euros" per item, and were ultimately resold in the brand's boutiques for "between 1,000 and 3,000 euros," explains the specialist website Fashion Network .

Two months after this legal action, the company has been criticized for allowing its subcontractors to exploit Chinese workers. According to the verdict of the Milan court, a copy of which was obtained by Agence France-Presse on Monday, July 14, the fashion house has been placed under "judicial administration" in Italy. This measure, which will last one year, is intended "more for prevention than repression," the same source explained.

Unsurprisingly, Loro Piana claims it was unaware of its subcontractor 's activities. It claims that when the company was informed on May 20, "it cut off all contact with the supplier in question within 24 hours," according to a statement sent to AFP on Monday evening. "Loro Piana strongly condemns any illegal practices and reiterates its ongoing commitment to protecting human rights," the same source said.

Loro Piana is, however, accused by the judges of "not having put in place adequate measures to verify the real working conditions (...) of subcontracting companies ." The company's management "negligently facilitated" the exploitation of labor by subcontractors, according to the Italian justice system, according to which this problem is linked to a "generalized lack of organizational models and a faulty internal audit system."

For their part, the investigators had estimated that the company's negligence in terms of adequate controls and effective audits had allowed it to "reduce costs and maximize profits ." As a result, the luxury house allegedly entrusted the production of clothing to a company without any production capacity, which in turn used another company, which in turn used workshops employing Chinese workers in Italy.

But that's not all. Undocumented workers were exploited in Italy without respecting health and safety laws in the workplace, including "wages, working hours, breaks, and vacations," the investigators also noted. The Carabinieri—gendarmes in Italy—found that workers were housed in "unlawfully constructed dormitories and in hygienic and sanitary conditions below the ethical minimum."

This legal action, however, endangers seven workers without residence permits, who have been referred to court. In addition, two Chinese nationals who own workshops have been brought to court for exploitation of labor, as well as two Italians for violations of health and safety standards in the workplace. Fines totaling more than €181,000 and administrative sanctions of nearly €60,000 have also been imposed. The operations of two Chinese workshops have also been suspended "for serious safety violations and the use of undeclared labor."

The luxury brand Dior, also owned by LVMH, was ordered in May 2025 to pay two million euros in aid to "victims of exploitation" as part of an investigation into the working conditions of its subcontractors by the Italian competition authority, which however ruled out any "infringement" .