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Inside Italy’s Shadow Economy

Author: Elizabeth Paton & Milena Lazazzera, The New York Times, Published on: 20 September 2018

In [...] the southern Italian town of Santeramo in Colle, a middle-aged woman [...] stitched carefully at a sophisticated woolen coat, the sort of style that will sell for 800 to 2,000 euros ($935 to $2,340) when it arrives in stores this month as part of the fall and winter collection of MaxMara, the Italian luxury fashion brand.

But the woman [...] receives just €1 from the factory that employs her for each meter of fabric she completes...

The unregulated work she completes in her apartment is outsourced to her from a local factory that also manufactures outerwear for some of the best-known names in the luxury business, including Louis Vuitton and Fendi. The most she has ever earned, she said, was €24 for an entire coat.

Home work — working from home or a small workshop as opposed to in a factory — is a cornerstone of the fast-fashion supply chain...

Increased pressure from globalization and growing competition at all levels of the market mean that the assumption implicit in the luxury promise — that part of the value of such a good is that it is made in the best conditions, by highly skilled workers, who are paid fairly — is at times put under threat...

Puglian factory managers stressed they adhered to union regulations, treated workers fairly and paid them a living wage. Many factory owners added that almost all luxury names — like Gucci, owned by Kering, for example, or Louis Vuitton, owned by LVMH Moët Hennessy Louis Vuitton — regularly sent staff to check on working conditions and quality standards.

When contacted, LVMH declined to comment for this story. A spokesman for MaxMara emailed the following statement: “MaxMara considers an ethical supply chain a key component of the company’s core values reflected in our business practice.” 

He added that the company was unaware of specific allegations of its suppliers using home workers, but had started an investigation this week. [also incl. comments from Tod's & Euroshoes]

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