Italian prosecutors have criticized top luxury brands for not adequately overseeing their supply chains. However, no charges will be filed against these companies.
Dior, a prestigious French luxury fashion house founded by Christian Dior in 1946, is renowned for its high-end fashion, accessories, fragrances, and beauty products. Dior handbags, often flaunted by celebrities worldwide, have come under scrutiny due to a recent investigation by Italian prosecutors.
The investigation revealed that Dior, along with Italian luxury giant Giorgio Armani, spends a fraction of the retail price to produce these bags.
According to a report by The Wall Street Journal (WSJ), Dior pays its suppliers a mere 53 euros (approximately ₹4,700) per handbag, which it then sells in stores for 2,600 euros (over ₹2 lakh).
Similarly, Armani’s handbags, initially purchased for 93 euros (around ₹8,385) from suppliers, are resold to the brand for 250 euros (approximately ₹22,540) and subsequently priced at around 1,800 euros (about ₹1.62 lakh) in stores. The WSJ report also noted that these figures exclude costs for materials such as leather, as well as additional expenses related to design, distribution, and marketing.
The investigation by Italian prosecutors in Milan focused on the use of third-party suppliers by these luxury brands. The prosecutors criticized the brands for failing to oversee their supply chains properly. Despite these findings, the companies will not face any charges related to the investigation.
Dior has yet to respond to the report. However, Armani stated that it has “control and prevention measures in place to minimize abuses in the supply chain” and is “collaborating with the utmost transparency with authorities,” according to WSJ.
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Consulting firm Bain reported that Italy is a hub for producing luxury clothing and leather goods, with thousands of small manufacturers generating 50 to 55 percent of global output.
Dior remains one of the leading luxury brands globally. Its elegant and sophisticated designs have solidified its place in haute couture and ready-to-wear collections. Over the decades, Dior has expanded its influence under the creative direction of notable designers like Yves Saint Laurent, John Galliano, and Maria Grazia Chiuri, maintaining its legacy of elegance and modernity in the ever-evolving fashion industry.
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