Exclusive-Italian prosecutors probing supply chain of around a dozen more fashion brands -source

By Emilio Parodi

LONDON (Reuters) – Prosecutors in Milan are investigating the supply chain of around a dozen more fashion brands, a person with knowledge of the matter told Reuters, after a unit of France’s LVMH in Italy was placed under court administration in a worker exploitation probe.

On Monday, a Milan court appointed a commissioner to run an LVMH-owned maker of Dior-branded handbags after an investigation into four of its suppliers based in the surroundings of Italy’s fashion capital uncovered illegal working conditions for staff.

On-site inspections and checks on electricity usage data led prosecutors to allege workers were employed for extended hours, working often into the night and during holidays. Some of the staff slept where they worked, had no regular contracts, with some having illegally immigrated into Italy.

This is the third such decision this year by the Milan court in charge of pre-emptive measures, which in April took similar steps in relation to a company owned by Giorgio Armani due to accusations the fashion group was “culpably failing” to properly oversee its suppliers. Armani Group said at the time it had always sought to “minimise abuses in the supply chain”.

LVMH on Monday declined to comment on the court’s decision.

Milan prosecutors and Italian police are investigating further small manufacturers that supply around a dozen other brands, the person said, declining to provide further details because the information is confidential.

The appointment of a special commissioner is intended to give the fashion brands time to fix problems in their supply chain while continuing to operate.

Neither LVMH nor Armani are under investigation, while the suppliers targeted by the probe face accusations of worker exploitation, copies of the court decisions seen by Reuters showed.

(Reporting by Emilio Parodi; Writing by Valentina Za; Editing by Matt Scuffham)