A Giorgio Armani Group-owned firm has been placed into judicial administration by an Italian court after a criminal probe by Milan’s labor inspectorate uncovered evidence that it was indirectly subcontracting production to Chinese-run companies that abused and exploited workers, casting into doubt the extent of its supply chain due diligence and knocking further askew the ethical halo of “Made in Italy.”
Giorgio Armani Operations (GAO), billed as its parent company’s operating and manufacturing arm, was deemed by the Court of Milan as “incapable of preventing and curbing phenomena of labor exploitation within the production cycle” due to its failure to implement “suitable measures to verify the real working conditions or technical capabilities” of its contractors, thereby facilitating the “crime of gangmastering.”
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In a ruling that was made public last Friday, the court said that GAO had outsourced the production of its entire 2024 collection of leather bags, belts and accessories to Manifatture Lombarde, a supplier whose inadequate production capacity resulted in the recruitment of four factories owned by Chinese nationals in Bergamo and Milan that lowered costs by “resorting to the use of irregular and clandestine labor in exploitative conditions,” including undocumented Chinese and Pakistani migrants.
The factories subjected its employees to “particularly disadvantageous working conditions,” paying them 2-3 euros (roughly $2-$3) per hour to toil for more than 14 hours a day, sometimes seven days a week. The illegally built dormitories in which workers lived were also unsafe and unsanitary, the court said.
According to investigators, the companies made bags that were sold to Manifatture Lombarde for 93 euros ($99), re-sold to GAO for 250 euros ($266) and then offered for sale by Armani for 1,800 euros ($1,915). The factories have been suspended, fined 80,000 euros ($85,133) and dealt with administrative sanctions of 65,000 euros ($69,170). Their owners will face further investigation for their noncompliance with workplace and employment laws.
While the contract between GAO and Manifatture Lombarde included a code of conduct that banned the use of subcontractors, the company is being placed under receivership for what the court described as “culpably failing to check the production chain and remaining inactive despite being aware of the outsourcing of production by the supplying companies.”