Dior boycotted for inflating handbag prices 50 times

According toFortune, inflating product prices by 50 times is not the biggest problem for Dior, because this company has faced a wave of criticism for cooperating with factories in Italy that are accused of exploiting labor.

Also according toFortune, a court in Milan (Italy) is considering labor issues related to LVMH - the world's largest luxury group from France and owner of the Dior brand.

Specifically, two companies Manufactures Dior SRL and Christian Dior Italy SRL, which are affiliated with LVMH, were accused of using illegal immigrants from China and the Philippines inside factories in Italy.

Most of the workers at the two companies had to sleep in the factory because the factories operated 24 hours a day, without days off. Safety devices were also removed from the machines to speed up production.

These companies sold each bag to Dior for 53 euros (about 1.4 million VND). These bags were then sold in Dior stores for 2,600 euros (about 70 million VND), nearly 50 times the production cost.

The investigation has a significant impact on a famous brand like Dior, which is headed by Delphine Arnault, daughter of Bernard Arnault, the billionaire behind Moet Hennessy Louis Vuitton (LVMH).

Following the news that Dior was involved in a sweatshop scandal in Italy, on Chicment, an online forum about luxury goods with more than 690,000 members, many users were shocked and outraged by the revelations and called for a boycott of Dior.

One forum member said he had considered buying a Lady Dior bag, but had completely given up after reading the news. Another user expressed concern about worker mistreatment. While others have tried to return items they bought in the past week.

According toReutersThe luxury industry’s supply chain has come under increasing scrutiny from consumers and investors in recent years. To mitigate reputational risk, fashion brands have limited the number of subcontractors and in-house production.

More than half of the world’s luxury goods are now produced by small factories in Italy. But in reality, these companies are all founded by Chinese people, who often use illegal labor to reduce costs.

SheetKorea Joongang Daily"No one wants to buy so-called luxury bags made by abused factory workers," said Lee Jae-ik, an office worker who frequents high-end stores in and outside Korea.

“When I buy a luxury item, I am buying the story behind it. I am buying the bag that Grace Kelly, Jane Birkin and Princess Diana carried and that LVMH advertises as being made in its workshops by expert craftsmen. The recent scandal is unfortunate, but it is nothing new,” Lee added.

According to a European report in 2023, about 77% of all shoppers said they would care if designer goods were sustainably produced. Of that 77%, more than half of consumers would be willing to pay up to 10% more if the item was sustainably produced or distributed.

South Korea is one of the world's largest luxury markets. Per capita spending in the country is expected to be the highest in the world by 2022, and the market is expected to be the seventh largest globally at $14.65 billion. The four major brands - Hermes, Louis Vuitton, Chanel and Dior - recorded sales of more than 5 trillion won ($4.1 billion) last year, despite steadily raising prices.