Do you know how much luxury bags of Dior and Armani cost? Startling revelations made after Italian police raid Milan units

Consumers pay hefty amounts for the products of established brands for their luxurious materials, quality craftsmanship, prestigious logos, and fashionable silhouettes. But all that glitters is not gold and most of the time there is more than what meets the eyes. After the Italian police had raided some of LVMH's Dior suppliers that make luxury handbags in Milan, the prosecutors said that Dior paid $57 to produce bags that are sold for $2,780 in retail, reports 'Business Insider'. After an initial probe, judges placed the Dior and Armani units under judicial administration for one year, accusing them of exploiting the workers and not abiding by the labor laws in place.

Labor laws violated

According to 'Reuters', Dior didn't take "appropriate measures to check the actual working conditions or the technical capabilities of the contracting companies." The news outlet reported that the workers were sleeping in the facility so bags could be produced around the clock.

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Chinese-owned firms under lens

Prosecutors claimed in the papers submitted to the court that the
Chinese-owned firms were the subcontractors and most of the workers were from China. Seven of these Chinese workers did not have required documentation and two were living in the country illegally.

Giorgio Armani under investigations

Giorgio Armani too has been accused of not properly overseeing its suppliers. Investigators have also found that Armani pays contractors $99 per bag for products that are sold for more than $1,900 in stores.

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Unfair competition

Talking to Reuters, the president of the Milan Court, Fabio Roia, said that the main problem is that the people are mistreated. He also said that the main problem is the unfair competition that pushes law-abiding firms off the market.

LVMH CEO

According to the Bloomberg Billionaires Index, LVMH CEO Bernard Arnault is the world's third richest person. His daughter, Delphine Arnault, is the CEO of Dior.

FAQs

Why have Dior and Armani units been placed under judicial administration?
Dior and Armani's units have been placed under judicial administration for one year after they were accused of exploiting the workers and not abiding by the labor laws.

Who is the owner of Dior?
LVMH CEO Bernard Arnault is the world's third richest person. His daughter, Delphine Arnault, is the CEO of Dior.