Is Luxury Still Luxury?

HAVE THE RECENT SCANDALS KNOCKED PUBLIC CONFIDENCE IN LUXURY BRANDS?

This year Business of Fashion have released several articles delving deeper into the recent scandal that exposed luxury brands Dior and Armani’s use of Italian sweatshops.

But it seems this practice is not unknown nor uncommon. It has been discovered that luxury brands frequently ignore red flags for the sake of convenience and cost by turning a blind eye to labour exploitation in their supply chains.

“Everybody is aware of the situation,” said Hakan Karaosman, associate professor at Cardiff University who wrote his PhD on luxury supply chains. “People don’t want to ask questions, because if they do, they open Pandora’s box.” - Business of Fashion

According to BOF it began in the 1990s, when Chinese immigrants came to Florence and found work in factories for the fashion industry. These factories often cut costs to get ahead of their competitors and became service providers to luxury fashion houses. These cut costs resulted in employing illegal migrant workers, disregarding regulations on wages, working hours and health and safety.

These Chinese-owned factories were able to offer good quality products with extremely flexible lead times at cheaper rates and so were an obvious option for luxury houses who would benefit. Running the risk of losing their exaggerated profit margins, these factories have remained in luxury supply chains for 30 years and suppliers are finding it “impossible” to find alternative options.

This discovery into behind the scenes of luxury is extremely disturbing and has affected their image of a once respected industry.

'Prosecutors say the issues are systemic and entrenched: they are not a bug, but a feature in a luxury system designed to prioritise maximising profits over worker welfare' - Business of Fashion

So what can brands do in order to recover public confidence?

REMOVE ALL EXPLOITATION

• Confirm that their supply chain has been fully investigated for exploitation and provide evidence
• Refuse to work with businesses that exploit their workers
• Maintain communication and regularly audit suppliers and confirm they meet legal requirements and standards
• Ensure suppliers are paid according to fair wage standards and working conditions

KEEP SUBCONTRACTING UNDER CONTROL

• Contractually demand notification of subcontractors or deny the use, stating clear consequences if breeched
• Investigate any subcontractors prior to agreeing their use
• Demand regular audit reports of subcontractors from suppliers

EDUCATE CUSTOMERS

• Ensure customers are aware of sustainable practices and communicate them clearly and honestly
• Educate customers about the importance of corporate social responsibility and uphold those responsibilities
• Stay up to date knowing the latest sustainable news and research

GOOD BUSINESS PRACTICES

• Set achievable goals that promote steady, consistent growth
• Give suppliers realistic time frames or be prepared to cover the cost - Improve purchasing practices
• Reduce product quantities
• Use sustainable materials and continually seek to use more

At LLUK we ensure the welfare of our employees and value the incredible skill they bring to the company. If you want a trusted textile service provider in your supply chain, get in touch with us via the link below.

https://www.lluk.co/contact