Paris: Luxurious brands like Dior and Armani are renowned for their high-priced products, but recent revelations show that they acquire these goods at a fraction of the selling price. According to investigations and reports, these brands buy products for very low prices and sell them at exorbitant rates.
How Much Are They Really Worth?
- Dior: Buys a handbag for €53 and sells it for €2,600.
- Armani: Purchases a handbag for €93 and sells it for €1,800.
Supplier Payments vs. Retail Prices
- On average, suppliers are paid around $99 (₹8,200) for a handbag that luxury brands sell for around $1,600 (₹1.62 lakh).
Supplier and Worker Conditions
- Many suppliers for these brands do not provide fair wages or proper facilities to their workers.
- Investigations in Italy revealed that many workers in Dior and Armani workshops worked in poor conditions, lacked proper documentation, and were forced to work long hours without holidays.
- Safety devices were often removed from machines to increase productivity.
Social Media and Public Backlash
- Following the revelations, both Dior and Armani have faced significant criticism on social media.
- While the brands will likely not face legal action, some of their suppliers might due to worker exploitation and safety violations.
Industry Insights
- The costs covered by the brands include design, distribution, and marketing, but even with these expenses, the selling price is many times higher than the production cost.
- These practices highlight the stark difference between the production costs and the retail prices of luxury items.
This situation exposes the substantial markup luxury brands place on their products and the significant profit margins they enjoy, often at the expense of fair labor practices and ethical sourcing.
