That’s gross profit margins which is significantly higher than net. I think
With some luxury companies their net profit margins are still around fifty percent but I could be wrong.
Dior supplier in Italy under fire for labour exploitation
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With some luxury companies their net profit margins are still around fifty percent but I could be wrong.
Even if the bags were made with the cheapest leather and materials, I naively assumed by buying luxury products, a part of my funds would go towards proper sanitation in the factories, training and safe factory equipment.
The report stated safety devices on Dior's factory machinery were removed so that they can make bags faster. This is the mind blowing part of all. There was no regard for workers safety. There were illegal immigrants in these factories, which means these workers had little to no rights in that country (Italy).
How many accidents went unreported in these factories?
Its sickening.
The report stated safety devices on Dior's factory machinery were removed so that they can make bags faster. This is the mind blowing part of all. There was no regard for workers safety. There were illegal immigrants in these factories, which means these workers had little to no rights in that country (Italy).
How many accidents went unreported in these factories?
Its sickening.
Thanks for explaining! I don’t pretend to know anything about the laws there, was just trying to find an explanation as to why moving production would lower costs.
Interesting facts on Louis XIV! Was he also the one that encouraged more opulent outfits at court to encourage domestic production of textiles and apparel?
Sure, that's exactly what I wrote. Net profit margin is also public information, Dior's was about 7% last year. This is the total for the company, individual product's' margins are usually not publicly disclosed and can vary greatly (can even be negative or very high, e.g. +150%).
It wasn't that way round, but that's what happened. The Court of Versailles under Louis XIV, the Sun King, became the blueprint of high fashion.
I’m surprised Camilla is carrying this bag. Think this was intentional with a request from Lvmh? Frankly think it’s weird and out of touch. Natalie Portman also was wearing a Dior dress while attending a screening of her latest movie. So the world moves in. Press doesn’t seem to care.
people.com
Queen Camilla Unexpectedly Carries 'Lady Dior' Handbag Famously Worn and Named After Princess Diana
Queen Camilla made a surprising addition to her royal wardrobe with a handbag that holds a poignant connection to Princess Diana: the Lady Dior, a bag famously worn and named after the late royal
It's not just about the country or legislation. Some industries are more prone to abuse than others across borders. Factories that rely labor where there is a great power imbalance and lack of controls or safety nets such as using immigrants labor (that may tolerate more abuse due to fear of losing visas or sent out of the country) and seasonal labor which is common in the agricultural sectors are always more prone to abuse in any country, also in places like Switzerland, Sweden or Utah.
I don't agree that the situation is all the same all across Europe though, and especially certain areas of Italy have a particularly bad track record, not with regards to the laws, but the application of them in real life, ie with checks and balances.
This 'scandal' has some similarity to the leather worker case that was documented a few years ago in the luxury behind the mirror documentary where safety measures had been dropped in the name of efficiency.
I'm pressing there will be more to come.
i saw new articles from today regarding the opening of investigations on Dior and Armani. I posted one of them here.
The official press release:
Finally some attention in the mainstream media over here.
AGCM - Autorita' Garante della Concorrenza e del Mercato
Il sito ufficiale della Autorita' Garante della Concorrenza e del Mercato
en.agcm.it
Finally some attention in the mainstream media over here.
IF this isn't the case for other brands like Chanel, Hermes, etc. they would be coming out in droves to show the world that they do not do such practices. They would be plastering their socials with images like these:
IF they are silent, it means that they are all doing the same thing.
IF they are silent, it means that they are all doing the same thing.
Dior and Armani Respond to Italian Competition Authority Probe Into Supply Chain
Dior said it has cut ties with two suppliers in Italy after a probe by Italian authorities into allegations of worker exploitation.
wwd.com
From the WWD article (thanks @Flowerlily for sharing!):
Not sure why it matters that a men's or women's bag was made by the factory, but for the optics of the brand where most of its sales comes from women's products, I guess it matters. So it's not the Book Tote.
Dior is arguing that it has reputable suppliers in its supply chain, and at the moment, we only know that 2 suppliers in their chain had such practices. Dior is making claims that are easily verifible or refutable by authorities, and it has a lot more to lose if it was lying (it can be worse for the brand if their claims are falsified).
This doesn't mean Dior is completely innocent. It is definitely time to stop contractors who outcompete legitimate businesses by exploiting its workers.
I can't wait to hear which other brands' suppliers have been investigated!
Dior finally speaks up! And they made some good points. Their profit margin is not an anomaly in the luxury industry. It is possible that the factories did have deceptive practices they didn't know, considering 53 Euros per bag ended up somehow becoming 2-3 Euros per hour for the employee. I doubt it would take anywhere near 20 hours to make a bag (let alone even one hour!), so the supplier is pocketing a lot of the money from the 53 Euros per bag at the expense of its employees.
Not sure why it matters that a men's or women's bag was made by the factory, but for the optics of the brand where most of its sales comes from women's products, I guess it matters. So it's not the Book Tote.
Dior is arguing that it has reputable suppliers in its supply chain, and at the moment, we only know that 2 suppliers in their chain had such practices. Dior is making claims that are easily verifible or refutable by authorities, and it has a lot more to lose if it was lying (it can be worse for the brand if their claims are falsified).
This doesn't mean Dior is completely innocent. It is definitely time to stop contractors who outcompete legitimate businesses by exploiting its workers.
I can't wait to hear which other brands' suppliers have been investigated!
Even if they didn’t know, shouldn’t they have known? Shouldn’t they be regularly visiting these subcontractors? There have been so many articles on labor related issues with Italian factories it really surprises me re lack of oversight. I just watched the documentary luxury behind the mirror which discusses tanneries and fur. I will never look at buying leather the same way again. Abuse of Senegalese workers by thug type Italian subcontractor working for Zambri. Since then I’m sure they’ve been fired but they must work for someone else now. Max mara has also really lost its status in my eyes after seeing them source rabbit fur from china and the level of cruelty and animal abuse which continues today with fur farms in china. Just go google fur farms in china. It’s abhorrent. I am glad some luxury brands like Chanel stopped using fur and exotics. All the brands need to as well. There is so much suffering happening with these animals and serious bio security concerns. We don’t need another Covid.
Hermes came out with a reel of their factories.
Can't wait to see Chanel's and Dior's
While I don't think hermes will be touched by these scandals as much Dior or Chanel simply becaue of the way these brands are run, it's worth noting that not every item is made in the same place and these brands may outsource different product categories. Much Hermès ready to wear is produced in Italy, although I don't mean to imply that it's necessarily made under sweatshop conditions.
I'm having a hard time believing Dior or someone at LVMH was unaware of these conditions, it's not such a big world after all. And outsourcing in the industry has been covered extensively in the French press for a long time because there is an obsession with 'buying French ' and supporting local industries. Here are some examples from like ten years ago, translated with chatgpt.
"The most recent one is the "Luxury Special" issue of Capital magazine from January 2011 (Béghin, 2011). It reveals, in particular, the outsourcing of part of Kenzo and Givenchy's ready-to-wear production to Poland, whereas the latter used to be manufactured in the Nord-Pas-de-Calais region; the Vuitton brand makes the leather uppers for its shoes in Romania and those for its sneakers (sports shoes) in India, in its factory in Pondicherry; even Hermès, which is often considered one of the few French houses that has preserved its industrial tools and the artisanal nature of its products, tends to outsource certain phases of the production process to Nigerian (belt buckles) or Malagasy (finishing of scarf edges) subcontractors."
The malagasy finishing of silk scarves is well known, although im not sure if it's still the case. In any event, if it could help the local economy of Madagascar, that is a good thing and really needed.
And about how the sub contractors in France were suffering after the crisis when the brands were going strong explaining why contractors are used from a business perspective, not just related to costs.
'Vuitton is, among the major brands, the one that most frequently resorts to subcontracting, even though it can rely on thirteen of its own workshops in France. "This represents between 40 to 60% of its total leather goods production," says an internal source from the brand's industrial management. Vuitton refuses to comment on this figure. The LVMH subsidiary has several dozen subcontracting sites in France. The Ateliers d’Armançon are the brand’s main suppliers. The two parties have been working in trust since 1971, to the point that some highly strategic products, such as the Capucine bag, are sometimes tested by the Armançon leather craftsmen even before they are tested by those of Vuitton.'
The same article also has an interesting example about pricing which makes the Dior bag profit margin example from today's day and age 13 years later honestly disgusting.
'The clients also improve their profitability by outsourcing their production to third parties: "Manufacturing a belt for a very large luxury house costs me 9 euros, I invoiced them 39 euros, and they resold it for 750 euros," calculates Stéphane Collaert, who managed the Collaert L’Aiglon workshops before taking over Texier's leather goods production. "The staff are well paid, but they do not have the same benefits as those who belong to a large group - 13th-month salary, seniority bonus, profit-sharing, and incentives," notes Patrick Thélot, CEO of KS Groupe, a temporary staffing company for haute couture.'
I do wonder which item it is, i was almost hoping it would be the booktote as it's obvious and extremely simple construction. When the cost of the bag is 53 euros from the supplier, that doesn't mean the bag cost 53 euros to make. It cost much, much less to make, as the supplier needs to make a profit also. Not sure if materials are included in the cost if they were provided by Dior.
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