There was an investigation on Luxury fashion brands DIor and Armani by Italy’s competition watchdog on July 17 in which these brands were accused of not paying their suppliers on time and over exploiting their workers by giving them a lot of work. As the part of the process the Guardia di Finanza financial police carried out the inspections on the headquarters of Dior and Armani.
This was the second investigation of both of the luxury fashion brands as the first investigation was also done earlier this year following the allegation of labour law violations.
The Armani group said that “the allegations have no merit and are confident of a positive result following the investigation.” Dior, meanwhile, said it condemned “in the strongest terms these acts contrary to its values and the code of conduct signed by these suppliers.”
The Violation By THE Competitors
Both Dior and Armani were also accused of customer violation by its competitors by the way the company used to sell their products to the customer and marketed their goods. “In both cases, the companies may have issued untrue statements about their ethics and social responsibility, in particular with regard to working conditions and compliance with the law by their suppliers,” it said. It noted that the companies “emphasized craftsmanship and quality.”
“However, in order to make certain articles and clothing accessories the companies allegedly used supplies from workshops and factories employing workers who would receive inadequate wages,” it added. “In addition, such workers would work hours in excess of the legal limits and in inadequate health and safety conditions, in contrast to the production excellence levels the companies pride themselves.”
Also Read: 8 Hour Eating Window Boosts Heart Death Risk by 91%
Will These Accusations Affect Dior And Armani’s Sales?
These accusations to Dior and Armani of not being socially responsible and by thinking about shareholders rather than stakeholders may reduce their sales. Firstly, taking a lot of work from their workers may result in strikes and possibly loss in production and destruction raising costs and reducing total output.
Secondly, not paying the suppliers on time can also lead to suppliers to stop providing the raw materials which can also lead to no output and therefore these companies will need to look for alternative suppliers with the same quality of raw material which is pretty difficult. Moreover, along with this Dior and Armani might face government regulations over exploiting their workers which it had already faced. Therefore it is a huge risk of not being socially responsible.
Also Read: $234 Million Stolen From WazirX And Moved To New Address
1 Comment