Dior’s Nearly $3K Bags Only Cost It $57 To Assemble, Italian Prosecutors Find

Photo 262065911 © Neydtstock | Dreamstime.com

Fashionistas might be clutching their pearls at a new revelation from prosecutors in Milan, who have uncovered a stark contrast between the production costs and retail prices of luxury handbags from Dior and Armani.

An in-depth investigation into subcontractors, brought to the surface by a Wall Street Journal report, revealed that the cost to manufacture Dior handbags was purportedly a mere US$57, while these items were sold to shoppers for US$2,780. As a result of these findings, judges have placed units of both Dior and Armani under judicial administration for a year.

The probe focused on the LVMH-owned Dior’s use of third-party suppliers, suggesting significant labor exploitation of migrant workers. Documents showed that the US$57 paid to suppliers covered production costs but excluded raw materials like leather.

The situation for workers was dire, with reports of them working excessively long hours and even sleeping on-site to keep up with production demands for as low as US$2 an hour. Safety measures on machinery were allegedly removed to expedite the process, further jeopardizing worker safety.

Giorgio Armani also came under scrutiny in the same investigation, which concluded that Armani paid subcontractors US$99 to produce bags, which then retailed for over US$1,900. 

This discovery sheds light on the hidden labor dynamics behind luxury goods. The judicial administration imposed on Dior and Armani units reflects the gravity of these labor violations. Remember, behind every glamorous accessory lies a complex supply chain—and it’s time that every stitch is inspected.

[via Wall Street Journal, Complex, TheStreet, Business Insider, cover photo 262065911 © Neydtstock | Dreamstime.com]