Memo Pad: More Fashion Exposure... Some Are Richer Than Others...

After dedicating significant time to the subject last December, the Italian TV program "Report" — the nation's equivalent of "60 Minutes" — last...

MORE FASHION EXPOSURE: After dedicating significant time to the subject last December, the Italian TV program "Report" — the nation's equivalent of "60 Minutes" — last Sunday retackled the issue of ethical manufacturing in the luxury goods sector — and put the spotlight this time around on brands such as Dior, Louis Vuitton, Ferragamo, MaxMara, Chanel, John Richmond, Dolce & Gabbana, Bottega Veneta, Moncler and Burberry. In the program, called "The Unemployed of Luxury," presenter Milena Gabanelli contended many firms don't have a full picture of their production cycles and are obsessed with producing large quantities, and detailed how certain processes are either outsourced or assembled in low cost and often illegal factories.

"Report" revealed how Italian contractors that maintain relationships with the brands often subcontract production to smaller factories run by Chinese owners to both cut costs and get a faster turnaround.

Dolce & Gabbana, Vuitton, Dior, MaxMara and Ferragamo all declined to comment on the program, and a Chanel spokeswoman in Paris said Tuesday it was still evaluating the broadcast and could not yet comment about it.

During various interviews with small Italian manufacturers who are battling competition from the low-cost subcontractors, the interviewees noted how a regularly hired Italian worker who sews shoes is paid 18 euros, or $28, an hour while a Chinese employee at one of the subcontractors receives half that.

Another manager explained how an Italian worker who pockets a net monthly salary of 1,000 euros, or $1,567, costs the company triple that amount with health care and other costs. "Unfortunately, very often we have to pass on work commissioned by fashion houses because the price they demand is unsustainable for us. We have high labor costs," said Anna Piergiacomi, president of the Federmoda Marche, the region's fashion association.

Still, Gabanelli pointed out that a 20-euro, or $31, difference on manufacturing costs shouldn't influence a luxury brand's decision, especially given the high markups on products.

The geographic areas explored by "Report" were again Tuscany's Prato area, near Florence; the Marche region, known for the production of footwear, and the Riva del Brenta district, near Venice, where, for centuries, small artisanal workshops on the banks of the Brenta river cobbled the finest quality shoes, specializing in ornate vamps.

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