Revisiting Labor Controversies within Luxury Fashion and More

Happy Thursday!

We’re excited to kick off our newsletter this week with a discussion on what’s going on in the industry. In conversation this week we’ll dive into some current ongoing luxury labor controversies and then analyze how upcoming European Union regulations could tackle these problems.

We’ll close out with our brand spotlights and highlighting innovation in fashion!

 Thanks for reading!

Headlines

A recent investigation into Italy's luxury fashion supply chain earlier this year reveals shocking labor conditions faced by migrant workers. In particular, workers from countries like Pakistan and China have endured long hours in sweatshop-like environments, crafting high-end products for iconic brands like Dior, Armani, and Montblanc.

These workers often toil under irregular contracts, working 12 to 14 hours a day in poorly regulated workshops. In some cases, luxury brands subcontracted their production to workshops with minimal oversight. For example, Dior's bags, retailing for thousands of euros, were reportedly produced by underpaid staff earning as little as 53 euros per bag.

The situation has led to legal repercussions, with brands like Armani and Dior being placed under temporary court supervision. Despite the companies’ claims of corrective actions, this is indicative of a larger systemic issue, as luxury brands and their suppliers have consistently come under fire in the past, (even as recent as 2022) with promises to do better in the future. However, many large brands have found that thousands of suppliers and subcontractors are difficult to monitor effectively​. 

This case highlights the hidden costs of luxury fashion and the human toll behind the "Made in Italy" label and reminds us of the need for regulation. As we’ve discussed, the EU is taking more steps to hold businesses accountable for their ESG practices and policies. Read more about this case here (1). 

Analysis of the Week

In order to tackle improving supply chains and bringing consumer transparency, the EU is introducing regulations to introduce digital product passports. Let’s learn more about what that entails and how companies will be affected!

Brand Spotlight

Learn about one of the sustainable brands on Trace’s marketplace! 

Check out today’s featured brand: Julkee Fashion

Julie Patel was driven by a mission to redefine fashion through global sustainability and the transformative power of upcycling. Julkee Fashion creates new innovative outfits through repurposing old saris, a traditional garment popular in South Asia. 

The core of Julkee fashion lies in preserving the environment, celebrating cultural heritage, and empowering individuals to make conscious fashion choices. Julkee fashion collaborates with skilled artisans, ensuring their craftsmanship is respected, their livelihoods are supported, and their cultural heritage is honored.

Innovation in Fashion

Seasalt - B-Corp certified British brand which uses sustainable and traceable materials that is also working towards being carbon neutral 

Trashie - Company that helps you responsible dispose of your clothes to ensure that the textiles get recycled 

Pact - Sustainable, carbon neutral fashion brand focused on everyday clothes and educating consumers