An Italian court has placed Giorgio Armani Operation, a subsidiary of the Armani Group, under judicial administration over the indirect exploitation of workers at one of its sub contractors.

Giorgio Armani Operations had outsourced the production of bags, belts and leather goods to two firms which in turn subcontracted the work to four Chinese companies on the outskirts of Milan. Workers for these companies were paid just 2-3 euro an hour, working seven days a week to make these goods. The goods were reportedly then sold to Armani’s subcontractors for 93 euros, before being re-sold to Armani for 250 euros. The market price paid by consumers for bags produced, was 1800 euro. The workers, mostly Chinese and Pakistani migrants, were forced to eat and sleep in the factories in degrading conditions. Cooking pots were stored in a filthy bathroom and, shockingly, the workers were required to use machinery with safety devices that had been “purposely and maliciously removed”.

The subcontracting and exploitation of workers went on from 2017 until February 2024, when police raided the workshops and discovered the Armani branded products. The investigation leading to the judgement was part of a wider sting operated by the Milan public prosecutors’ office, which has for years been investigating the exploitation of workers employed by sub-contractors who were used by large groups in the Italian fashion industry.

In a statement issued by the Armani Group, the luxury fashion house claimed that it “always had control and prevention measures in place to minimise abuses in the supply chain.” How then, did such abuses take place? According to the court, the investigations uncovered practices which were so deeply rooted and established, that they could be considered part of a wider business growth strategy. It is notable that the owners of the contracting and subcontracting companies are under investigation for exploiting workers but Armani Operations itself is not facing any probe.

While there is no evidence that Armani had knowledge of the exploitation, one might question how a luxury fashion brand, with annual revenue of approximately 2.5 Billion euros, can claim to be entirely inculpable. Abuse of labour laws in the fashion industry is well documented – it has been estimated that of the 75 million factory workers around the world, less than three percent earn a living wage – but such violations are more usually associated with counterfeits and fast fashion labels. The factories are commonly located in South East Asia. That such violations and abuses were occurring in Italy, just miles from the Armani headquarters, will be a wakeup call for the fashion industry and consumers alike.