Italian Court Lifts Controls on LVMH’s Dior Italian Unit Over Labor Practices
Milan, March 4, 2025 - An Italian court has announced the early termination of the special administration regime placed on Manufactures Dior SRL, an Italian subsidiary of French luxury giant LVMH, following allegations of labor exploitation in the production of Dior-branded handbags. The ruling marks a significant step for the brand, which has since implemented stringent measures to reinforce ethical compliance across its supply chain.
The Milan court had initially placed Manufactures Dior SRL, fully owned by Christian Dior Italia SRL, under court administration in June 2024 for a one-year period. This measure was imposed after an investigation alleged that the company had subcontracted work to Chinese – owned firms where labor violations were discovered. However, after nine months, the court determined that Dior had adopted the necessary structural reforms and supplier control procedures to prevent future infractions.
According to the court’s statement, Dior acted promptly to serve ties with suppliers deemed “at-risk” and established new best practices that earned judicial approval. The court recognized the company’s efforts in overhauling its supplier monitoring system, ensuring full compliance with Italian labor regulations.
“In detail, the fashion house resolved relationship with “at-risk” suppliers extremely quickly and also developed several best practices that received court approval”, the judges stated in their ruling.
With this decision, the Milan court has now revoked all three special administration measures imposed on fashion brands last year. Alviero Martini and an Armani unit were previously placed under similar oversight, only to have their restrictions lifted after demonstrating compliance with labor laws.
Dior’s Commitment to Ethical Standards
Dior welcomed the ruling, emphasizing that it had “further strengthened its operations along the supply chain, setting a new benchmark for best practices in the industry”. The house reaffirmed its dedication to upholding the highest standards of transparency, integrity, and respect throughout its manufacturing and supplier network.
“Dior firmly reaffirms its commitment to protecting and applying the core values of transparence, integrity, and respect throughout the supply chain”, the company said in a statement.
The court’s initial intervention stemmed from findings in June 2024 that revealed four subcontractors had employed 32 workers under substandard conditions. Among them, two were illegal immigrants, and another seven were found to be working without proper documentations. Investigators determined that these employees’ working and living conditions fell below the minimum legal requirements.
Acknowledging the gravity of the situation, the Milan court highlighted Dior’s constructive approach to the corrective measures. “The company showed a deep understanding of the rational behind the measure and saw this as an opportunity to strengthen and implement internal checks, aimed at avoiding a repetition of similar events”, the judge noted.
The case forms part of a broader crackdown by Italian authorities on labor exploitation in the fashion and luxury sectors. Over the past year, Milan’s prosecutors have intensified irregularities among various luxury manufacturers.
In response to these concerns, Milan’s Court of Justice proposed a nationwide initiative in June 2024, calling on luxury companies to enhance their oversight of suppliers and ensure compliance with labor laws. This initiative aims to reinforce ethical sourcing, strengthen labor protections, and maintain Italy’s standing as a global hub for luxury craftsmanship.
With the lifting of restrictions on Manufactures Dior SRL, LVMH’s Dior unit moves forward with a reinforced supply chain framework. These case serves as a pivotal moment for the fashion industry, highlighting the importance of stringent oversight and ethical responsibility in luxury production. As the global luxury sector evolves, ensuring fair labor practices remains at the core so sustaining its prestige and credibility.