The price of a luxury Christian Dior bag, retailing at $3,380, has been found to have a production cost of just $70.
On June 10, the Milan Court in Italy issued judicial preventive measures against Dior’s Italian division, Dior SRL, as reported by numerous accounts from the foreign press. A judicial administrator has also been appointed to supervise the business for a year due to the inadequate working conditions of four subcontractors who produce Dior bags.
The majority of these subcontractor factories are run by Chinese businessmen who employ illegal immigrants, operating 24 hours a day without breaks, with workers found sleeping at the factory to continue production.
Safety features were removed to speed up production. They also exploited labor to bring down the cost of manufacture, only paying them 53 euros (around $60) per bag. “Made in Italy” labels were added when the bags were cheaply produced and sold at 2,600 euros (about $3,080) in Dior stores.
The business division of Dior was held accountable by the court for its actions, claiming that it “neither verified the actual working conditions nor the technical skills of the supplier nor did they conduct regular audits.”
Italy, which produces about 50% of the world’s luxury goods, came under fire for allowing low-cost production companies run by Chinese immigrants, damaging the country’s traditional leather goods industry. Italian police and prosecutors have been looking into the labor conditions of subcontractors for luxury manufacturers for several years.
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