In a move to strengthen its supply chain and protect its brand image, Dior has announced the establishment of a new industrial division. This strategic decision comes in the wake of a significant scandal involving the outsourcing of production to illegal sweatshops in Italy.
The incident, which unfolded in early 2023, led to an investigation by the Italian Competition Authority into companies connected to Dior. It was revealed that these companies had outsourced the production of luxury handbags to sweatshops, where workers were subjected to poor working conditions and low wages. The handbags were then sold at exorbitant prices, highlighting the stark contrast between the brand’s luxurious image and the reality of its supply chain.
While the exact impact of this scandal on Dior’s sales is unclear, it undoubtedly tarnished the brand’s reputation. The incident sparked widespread criticism from industry experts and consumers alike, particularly in markets outside of Italy.
To mitigate future risks and ensure ethical production practices, Dior has appointed Giorgio Striano as Chief Industrial Officer. With a wealth of experience from his roles at EssilorLuxottica and Luxottica, Striano is well-equipped to oversee the new division and implement rigorous quality control measures.
The new industrial division will be responsible for:
- Vertical Integration: Bringing production in-house to ensure greater control over the entire process, from design to distribution.
- Supply Chain Transparency: Implementing stringent monitoring systems to identify and eliminate any unethical practices.
- Preserving Artisanal Know-How: Protecting traditional craftsmanship and supporting skilled artisans.
- Enhancing Efficiency: Optimizing production processes to improve speed and quality.
By taking these steps, Dior aims to safeguard its reputation, uphold ethical standards, and maintain its position as a leading luxury brand. This move signifies a significant shift in the company’s approach to production and underscores its commitment to transparency and sustainability.
