Giorgio Armani subsidiary shut down for ‘exploiting Chinese workers’

Josephine Mckenna
A sweatshop in northern Italy where leather goods were made by underpaid and exploited Chinese workers
A sweatshop in northern Italy where leather goods were made by underpaid Chinese workers - Italian Carabinieri via AP

Giorgio Armani was forced to shut down one of its luxury fashion subsidiaries by an Italian court over alleged exploitation of Chinese workers.

The decision followed a criminal investigation into Giorgio Armani Operations’ unit responsible for the design and production of clothes and accessories by the Carabinieri police’s labour inspectorate.

The alleged exploitation is related to work which was subcontracted and produced at illegal plants in the province of Milan using Chinese citizens who were employed off the books, according to Italian media reports.

An official Italian supplier to Armani, Manifatture Lombarde, is alleged to have subcontracted the production of bags, leather goods and Armani designer accessories.

Poor living accommodation
Poor living accommodation that labourers had to endure - Italian Carabinieri via AP

Investigators said Giorgio Armani Operations had been “incapable of preventing and curbing phenomena of labour exploitation within the production cycle, having not implemented suitable measures to verify the real working conditions or the technical capabilities of the contracting companies”, thus facilitating “the crime of gang mastering”.

Italian media said Manifatture Lombarde was paid €1.6 billion (£1.37 billion) between March 2023 and January 2024 for providing bags, belts and leather accessories through the subcontracting arrangement.

They said the operation had made it possible for the subcontractor to lower production costs, and avoid paying direct taxes, insurance and social security contributions, with no respect for workplace health and safety regulations, holiday entitlements or other benefits.

The court order said workers were made to work at the “exhausting” pace of more than 14 hours a day, were paid as little as €2 to €3 an hour and housed in “degrading” accommodation.

Neither Giorgio Armani Operations nor the 89-year-old stylist, recently named the third richest man in Italy with a fortune estimated by Forbes at over $11 billion (£8.7 billion), is under investigation.

In a statement released on Friday, Giorgio Armani Operations said: “The company has always had control and prevention measures in place to minimise the risk of abuses in the supply chain.”

A filthy makeshift kitchen used by exploited Chinese workers
A filthy makeshift kitchen used by exploited Chinese workers - Italian Carabinieri via AP

It is not the first time Italian authorities have targeted companies for abusing workers in their efforts to penetrate the murky world of sweatshop labour and subcontractors lying behind many areas of the fashion industry, which draws heavily on the so-called “Made in Italy” brand.

In January this year, Milan prosecutors working with police accused the handbag brand, Alviero Martini, of allegedly employing illegal Chinese workers in unsanitary workshops where they worked long hours to produce handbags that later sold for several hundred euros each.

Like Giorgio Armani, the court forced the company into judicial administration and it was fined more than €300,000.

In 2019, Italian authorities arrested Naples entrepreneur Vincenzo Capezzuto, head of Moreno Srl, for allegedly employing undocumented workers.

His workshop made shoes and bags for groups including Armani, Kering’s Saint Laurent and LVMH’s Fendi, whose products can sell for thousands of euros.

In 2019, the national statistics agency ISTAT said Italy’s underground economy was worth just under €183 billion and illegal activities were worth €19 billion.

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