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Entrance to Armani headquarters in Milan
Photo: Claudio Furlan / AP
The Italian police have uncovered a network of subcontractors in which Chinese workers manufactured handbags and other fashion items for some well-known companies under precarious conditions. A court has now placed a subcontractor of the fashion group Armani under judicial administration "to ensure legal processes."
The fashion house denied wrongdoing by GA Operations, which makes clothing, accessories and home decor for the Giorgio Armani Group brands. The company has “always taken control and prevention measures to minimize abuses in the supply chain,” the statement said. »GA Operations will work with the relevant authorities with the greatest possible transparency to clarify its position on this matter.«
According to the ruling, Giorgio Armani Operations outsourced the production of bags, belts and leather goods to two companies, which in turn commissioned the work to four Chinese companies with workshops on the outskirts of Milan. Health and safety regulations, as well as regulations regarding working hours, breaks and days off, were allegedly ignored.
Maximizing profits through undeclared work
Police said this was part of a system of "caporalato," the illegal placement and exploitation of labor, most commonly associated with the agricultural sector. Separate criminal proceedings are underway against the four factory owners. The system enables profits to be maximized by reducing labor costs through undeclared work.
A video released by the Carabinieri shows that the workers were sheltering in their factory. You can see a workshop in which leather goods are made, and there are two beds in an adjacent office. There are more beds on the upper floor, some of which are littered with clothes and blankets.
The footage shows a dirty bathroom and a makeshift kitchen with a gas burner and a sink piled high with dirty dishes and leftover food. The windows are covered with cardboard.
Handbag made for 93 euros, resold for 250 euros, for 1800 euros in the store
A diagram released by police shows that the Chinese subcontractor received 93 euros for a handbag, the middleman sold it to Armani for 250 euros, and the fashion house then put it on the market for around 1,800 euros.
The owners of the subcontractors are being investigated for exploitation of workers and illegal employment. No investigation was opened against Armani Operations, but it was placed under the administration of the court "because it culpably failed to control the production chain and remained inactive despite knowing that production was being outsourced by the subcontractors." Court documents show that the Chinese-owned workshops also produced goods for other fashion brands.
Milan prosecutors have been investigating for years the outsourcing of production by major corporations in the fashion and other sectors to subcontractors who allegedly exploit workers. The investigation is part of a broader investigation into the fashion supply chain in the provinces of Milan and Bergamo. The fashion company Alviero Martini, which had its bags made in Chinese workshops, was also recently placed under judicial supervision.
mgo/AP/Reuters