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Inside Luxury’s Broken Audit System

LVMH-owned Dior missed glaring problems during an assessment of working and safety conditions in its production arm in Italy last year, according to a review of unpublished court documents.
People walk near a Dior store in Milan's Galleria Vittorio Emanuele II.
Court documents revealed glaring issues in Dior's auditing practices in its Italy production arm. (Jakub Porzycki/NurPhoto via Getty Images)

AZ Operations, a sub-contractor of Manufactures Dior tasked with the production of leather items and based near Italy’s fashion capital Milan, was accused by Italian prosecutors in June of being a front for an operation that exploited workers.

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Further Reading

Inside Luxury’s Italian Sweatshops Problem

An Italian probe linking luxury labels including Dior and Armani to labour exploitation — with the supply chains of up to a dozen more brands under the microscope — has exposed a seedy practice deeply embedded in the luxury system, creating an unpredictable PR crisis at a precarious time for the sector, a BoF investigation has found.

Milan Proposes Supply-Chain Database Amid Sweatshops Probe

The Prefecture of Milan is aiming to beef up the fashion sector’s monitoring systems after an investigation by Milanese prosecutors found labour exploitation in the supply chains of luxury brands including Armani and Dior. The scheme currently in draft would be voluntary and limited to the Lombardy region.

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