Owning a luxury bag is a passion for many! While some criticize the hefty price tags, others cherish them as valuable possessions.
Did you know? The actual cost of making these high-end luxury bags is surprisingly low, a fact that might leave you astounded!
Dior, established by Christian Dior in 1946, is a prestigious French luxury fashion house acclaimed for its haute couture, accessories, fragrances, and beauty lines. Its iconic bags are often seen gracing the arms of celebrities worldwide.
Italian prosecutors uncover the actual cost of making Dior and Giorgio Armani bags
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A recent investigation by Italian prosecutors has uncovered that Dior and another Italian luxury giant, Giorgio Armani, pay minimal production costs for handbags that fetch thousands of dollars retail. The probe, led by prosecutors in Milan, focused on LVMH’s subsidiary and its outsourcing practices to third-party suppliers.
Actual cost vs selling cost!
According to The Wall Street Journal (WSJ), Dior pays only 53 euros (approximately Rs 4,778) per handbag to its suppliers, which are then retailed for 2,600 euros (approximately Rs 2.34 lakh) in stores.
Meanwhile, Armani purchases bags from suppliers at 93 euros (approximately Rs 8,385) and marks them up to around 250 euros (approximately Rs 22,540) before selling them for about 1,800 euros (approximately Rs 1.62 lakh) in stores.
The Wall Street Journal (WSJ) also noted that these costs do not include expenses for materials such as leather, or additional costs related to design, distribution, and marketing.
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Italian prosecutors have criticized the luxury brands for their oversight failures in managing their supply chains. Despite this, the firms will not face any charges stemming from the investigation.
Dior has not yet commented on the report, while Armani stated it has implemented “control and prevention measures to minimize abuses in the supply chain” and is cooperating transparently with authorities, according to the WSJ.
