Italy Court Lifts Controls on LVMH's Dior Italian Unit

The Milan court has lifted the judicial administration imposed on LVMH's Italian subsidiary, Manufactures Dior SRL, following an investigation into alleged labor exploitation in its supply chain. The decision comes after the company demonstrated progress in implementing controls to ensure compliance with labor legislation. The court's ruling highlights the growing scrutiny of the luxury fashion industry's supply chain practices and the importance of ethical manufacturing.

The Milan court placed Manufactures Dior SRL under judicial administration in June 2024, following an investigation that revealed serious violations of labor laws by four Chinese suppliers near Milan. The investigation found that workers were subjected to deplorable working conditions, including sleeping in the workplace and the removal of safety devices on machines to speed up operations. The court ruled that Dior's unit did not adopt appropriate measures to verify the actual working conditions or the technical capabilities of the contracting companies.

The court's decision to lift the judicial administration indicates that Manufactures Dior SRL has made significant progress in addressing the labor exploitation issues in its supply chain. The company has implemented measures to strengthen its supply chain oversight and ensure compliance with labor legislation. This includes regular inspections, data mapping, and close collaboration with suppliers to ensure they adhere to ethical labor practices and environmental standards.

The lifting of the judicial administration is a positive step for LVMH and the broader luxury fashion industry. However, it serves as a reminder of the systemic issues of labor exploitation and unethical manufacturing practices that continue to plague the industry. Other brands must take note of the findings of the investigation into Dior's supply chain and take steps to ensure ethical manufacturing practices in their own supply chains.



In conclusion, the Milan court's decision to lift the judicial administration on LVMH's Dior Italian unit highlights the importance of ethical manufacturing practices in the luxury fashion industry. The investigation into Dior's supply chain has revealed systemic issues of labor exploitation and unethical manufacturing practices, which other brands must address to ensure the sustainability and reputation of the industry. By strengthening supply chain oversight, reducing reliance on subcontractors, promoting transparency, collaborating with stakeholders, and investing in long-term partnerships with suppliers, luxury brands can help create a more responsible and sustainable fashion industry.