Labour exploitation in the high-end segment of the fashion system
Reuters reports that Italian police have visited the headquarters of nine high-end fashion firms as part of the Italian luxury fashion investigation into the alleged exploitation of workers employed by subcontractors. Officers requested documents relating to corporate governance and supply chain controls.
In December 2025, the investigation had already involved thirteen other brands, including Dolce & Gabbana, Gucci, and Prada.
This time, the companies that received the orders are Brunello Cucinelli, Moncler, Chanel, Bulgari, Jacob Cohen Company SPA, Etro, Stefano Ricci, Goyard Italie and Owenscorp Italia.
These brands became linked to the probe after authorities found subcontracting records and goods traceable to them during previous searches of two Chinese-run workshops accused of exploiting undocumented workers.
None of the companies is currently under criminal investigation, nor have prosecutors sought court-ordered administration for any of them. Most of the firms did not immediately reply to requests for comment. Chanel said it is cooperating with the Italian labour investigation and has terminated its relationship with the subcontractor.
The two Chinese-run workshops made garment bags, shopping totes, and pouches for Brandart and F. VL., both of which were raided by the Carabinieri. Those suppliers passed the goods directly to the nine fashion brands, which sold them under their own names.
Carlo Capasa, president of the Camera Nazionale della Moda Italiana, described these as isolated cases. The growing number of brands linked to the investigation suggests otherwise.
More importantly, these investigations reveal the production model behind luxury fashion.
The subcontracting labyrinth
Although these investigations are unfolding in Milan, the dynamics at play are anything but local. What we are witnessing is a global production model built on opacity. The exploitation uncovered among subcontractors serving luxury brands is not an exception — it is the predictable outcome of layered supply chains designed to reduce costs while distancing brands from legal and reputational responsibility.
Every additional layer of subcontracting increases the distance between the brand and the factory floor, making accountability progressively harder to establish while labour costs continue to fall. Brands can legitimately claim they had no direct relationship with the workshop where abuses occurred, even though those workshops ultimately exist to produce their goods.
This mechanism is hardly unique to fashion. Similar structures operate in electronics, agriculture, logistics and automotive manufacturing. Wherever relentless cost reduction becomes the overriding objective, labour is usually the first variable to be squeezed.
The financialisation of luxury
Luxury fashion has changed profoundly over the past few decades. Once dominated by family-owned ateliers centred on craftsmanship, the industry is now largely controlled by listed groups and investment-driven owners. Growth targets, quarterly earnings and shareholder expectations increasingly shape business decisions. Fashion houses have become financial assets as much as cultural ones.
Sweatshops and luxury fashion are therefore not disconnected realities. They are products of the same economic logic: maximise margins, outsource costs and push production through increasingly fragmented supply chains. These investigations do not expose an isolated failure — they reveal a system operating as intended.
Within such a model, ethical production becomes difficult to sustain because commercial pressure continually rewards lower costs over greater transparency. There are only varying degrees of responsibility.
Final thoughts
The Italian luxury fashion investigation highlights that these cases are not isolated incidents but symptoms of a production model built on fragmented supply chains. Whether it will lead to lasting structural change remains uncertain.
Previous investigations have also shown that closing individual workshops does not necessarily dismantle the system. Suppliers can disappear, reopen under different names, or continue operating for different clients, while the economic incentives that created the problem remain unchanged.
This is neither an Italian problem nor one unique to fashion. It reflects an economic model that systematically pushes production towards the lowest possible cost while distancing brands from responsibility. Until that underlying structure changes, similar investigations will continue to emerge — not only in fashion, but across industries built on the same logic. And each time, the response will sound familiar:
We didn’t know.