France's luxury industry has a serious problem with outsourcing production, with most of it being manufactured in underground workshops in Italy.

The French newspaper Liberation's front page revealed that products from various luxury brands under the LVMH Group, a major French luxury conglomerate, are produced in underground workshops in Italy through a series of subcontracting operations. For example, the brand "Loro Piana," owned by Bernard Arnault, was placed outside of "judicial management" due to a "negligence."

Experts analyze that the phenomenon of French luxury brands producing goods in underground workshops in Italy mainly involves the following situations:

1. Supply Chain Management Deficiencies

Italian luxury brands (such as Loro Piana) often outsource production to intermediary companies that lack actual production capabilities but pass the orders to illegal factories through multiple layers of subcontracting. For example, Loro Piana once subcontracted orders to shell companies such as "Sor-Man," and the final production was carried out by Chinese factory owners in illegal workshops on the outskirts of Milan.

2. Labor Exploitation Issues

Workers are forced to work more than 13 hours a day, without any days off per week, with wages as low as 4 euros per hour (about 33 yuan RMB), and they live in shoddy dormitories at the factory. For instance, a July 2025 survey found that 10 Chinese workers were beaten and still had their wages withheld, and the factory had safety hazards such as the removal of machine protections.

3. Regulatory Gaps

Although brands (such as those under LVMH) claim to have terminated cooperation, the court has determined that their regulatory systems have significant flaws and failed to verify the qualifications of subcontractors. For example, Loro Piana paid its first-tier subcontractors 80-100 euros per jacket, while the product's selling price ranged from 1000-3000 euros, resulting in a huge profit margin but meager worker income.

4. Industry Widespreadness

This type of incident is not an isolated case. Brands such as Armani and Versace have also been investigated by courts in recent years due to supply chain issues. A July 2025 survey found that there have been five similar cases in the Italian luxury industry in the past five years.

Original: www.toutiao.com/article/1840888891875392/

Statement: This article represents the personal views of the author.