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A recent investigation by Italian prosecutors has brought to light startling revelations about the production costs of luxury handbags sold by renowned fashion houses like Dior and Giorgio Armani. According to reports from the Wall Street Journal, these brands pay significantly low amounts to their suppliers for manufacturing these high-end accessories, which are then sold at exorbitant prices.
Dior, founded by Christian Dior in 1946, reportedly pays as little as 53 euros (approximately ₹4,778) per handbag to its suppliers. These same handbags are retailed in stores for prices reaching up to 2,600 euros (approximately ₹2.34 lakh). Similarly, Giorgio Armani’s handbags are purchased from suppliers at 93 euros (approximately ₹8,385) and are sold in stores for around 1,800 euros (approximately ₹1.62 lakh).
The investigation underscores that these production costs do not include expenses for materials like leather, nor do they cover additional costs such as design, distribution, and marketing, which further inflate the final retail price.
Italian prosecutors in Milan have criticized these luxury brands for their apparent lack of oversight over their supply chains. Despite the findings, the firms involved will not face charges related to the investigation.
In response to the allegations, Giorgio Armani stated that it has implemented control and prevention measures to minimize supply chain abuses and is cooperating transparently with authorities. Dior, on the other hand, has not yet issued a formal response regarding the investigation.
Italy, known for its craftsmanship in luxury clothing and leather goods, hosts thousands of small manufacturers and is a major global hub for luxury production, accounting for 50% to 55% of global output, according to consulting firm Bain.
Dior remains one of the leading luxury brands globally, renowned for its sophisticated designs and influential presence in haute couture and ready-to-wear fashion. Over the years, under the guidance of prominent designers like Yves Saint Laurent, John Galliano, and Maria Grazia Chiuri, Dior has maintained its legacy of elegance and modernity in the ever-evolving fashion industry.
Sources By Agencies
