Loro Piana Placed Under Judicial Administration Over Labor Abuse in Italy

Loro Piana, the luxury cashmere brand owned primarily by LVMH, has been placed under judicial administration by an Italian court for one year due to labor abuses in its supply chain, including subcontracting to Chinese-owned firms accused of worker exploitation. The court found that Loro Piana "culpably failed" to properly monitor its suppliers, prioritizing profit over labor oversight, with workers subjected to harsh conditions such as excessive hours and low pay. This ruling follows a broader crackdown on labor malpractice within Italy's luxury sector, where other major brands including Dior, Valentino, Giorgio Armani, and Alviero Martini have also faced judicial scrutiny. LVMH is currently dealing with multiple crises including impending U.S. tariffs and data breaches, compounding the reputational damage from these labor allegations. While Loro Piana itself is not facing criminal charges, the subcontractors and shell companies involved are under investigation, and the judicial administration will be lifted only if the company aligns with legal labor standards. The situation underscores systemic issues in the luxury industry's reliance on outsourced production and has significant implications for the reputation of LVMH and the broader luxury market.