Loro Piana placed under judicial administration over labour Exploitation Scandal

 Milan – Italian luxury fashion house Loro Piana, famed for its ultra-premium cashmere garments, has been placed under judicial administration by a Milan court following the emergence of serious allegations of labour exploitation and illicit subcontracting within its Italian supply chain.

The court order, issued by the Prevention Measures Section of the Tribunal of Milan, will remain in force for one year. It allows the company to continue operations under supervision while reforms are implemented to address critical failings uncovered by investigators. The decision follows an inquiry led by prosecutor Paolo Storari, working with the Carabinieri's labour inspection unit, which uncovered what the court described as "a production model based on illegal cost-cutting, safety violations, and human exploitation."

According to the prosecution, Loro Piana had outsourced the production of cashmere garments to a company named Evergreen, which investigators found had just seven employees and almost no production equipment. Despite this, it received sizeable orders from the luxury label. Evergreen then subcontracted work to another Italian firm, Sor-Man, which in turn relied on two Chinese-run workshops in Lombardy – Clover Moda Srl in Baranzate and Day Meiying in Senago – to carry out the actual manufacturing.

Prosecutors allege that these workshops were staffed primarily by undocumented Chinese workers who lived and worked in the facilities under degrading conditions. Evidence gathered through site inspections, utility records, and employment data suggests workers were forced to operate machinery stripped of safety devices, laboured seven days a week for up to 90 hours, and were paid significantly below legal minimum wage levels – reportedly as little as 4 euro per hour. In many cases, workers also slept on-site in squalid conditions, under constant surveillance. The entire system, according to the court, appeared designed to maximise profit margins by eliminating virtually all labour protections and safety costs.

Notably, the investigation revealed that jackets produced in these workshops cost Loro Piana around 100 euro per unit to manufacture but were later sold in company boutiques for prices ranging from 1,000 to 3,000 euro. The authorities believe the firm should have known about the irregularities, particularly given that in 2024 it commissioned a private audit into Evergreen that failed to address the supplier’s obvious lack of production capacity.

The ownership structure of Loro Piana includes French luxury conglomerate LVMH, which acquired 80 percent of the company in 2013. Members of the board of directors include Pier Luigi Loro Piana, heir to the founding family, alongside LVMH chairman Bernard Arnault and his son Antoine Arnault. However, none of these individuals are currently under investigation.

In a statement issued following the court decision, Loro Piana said it had no knowledge of the illegal subcontracting chain until it was informed by authorities on 20 May 2025. The company said it terminated all relations with the supplier in question within 24 hours of receiving the notification. “Loro Piana firmly condemns any illegal practice and reiterates its ongoing commitment to protecting human rights and complying with all relevant regulations across its entire supply chain,” the company said, adding that it would cooperate fully with judicial authorities.

The case has sent shockwaves through the Italian luxury fashion industry, long known for discreet exclusivity and refined craftsmanship. Loro Piana now joins a growing list of high-end labels – including Valentino, Dior, Armani and Alviero Martini – that have come under legal scrutiny in recent years for the use of exploitative labour practices through opaque supply chains. It has reignited debate over the accountability of luxury brands and the urgent need for systemic reform in the fashion sector.

Under judicial administration, Loro Piana will be subject to direct oversight by a court-appointed commissioner, who will monitor its compliance with labour and safety regulations. Should the company take effective steps to improve governance and transparency in its operations, the court may consider lifting the administrative measure before the one-year term concludes.

The scandal raises uncomfortable questions about the true cost of so-called “quiet luxury” and whether elite branding can continue to be credibly maintained when built on a foundation of invisible and abused labour.

PS