Dior, founded by Christian Dior in 1946, is a renowned French luxury fashion house celebrated for its high-end fashion, accessories, fragrances and beauty products. Its bags are flaunted by many celebrities across the world. But a recent investigation by Italian prosecutors has revealed that Dior and another Italian luxury giant Giorgia Armani pay just a small amount to produce these handbags that retail for thousands of dollars. This came after Italian prosecutors in Milan investigated the LVMH subsidiary's use of third-party suppliers in recent months.
The Wall Street Journal (WSJ) reported that Dior pays a mere 53 euros (Rs 4,778) per handbag to its suppliers, which it then sells in stores for 2,600 euros (Rs 2.34 lakh).
Meanwhile, Armani's bags, initially bought for 93 euros (Rs 8,385) from suppliers, are resold to the brand for 250 euros (Rs 22,540) and subsequently priced around 1,800 euros (Rs 1.62 lakh) in stores, the Journal further said.
The outlet further said that these costs exclude expenses for materials like leather, and additional expenses such as design, distribution and marketing.
The Italian prosecutors have slammed the luxury brands for failing to oversee their supply chain. These firms will, however, won't face any charges related to the investigation.
Dior hasn't responded to the report, but Armani said it had "control and prevention measures in place to minimise abuses in the supply chain" and was "collaborating with the utmost transparency with authorities", as per WSJ.
Consulting firm Bain said that Italy hosts thousands of small manufacturers, and is a hub for producing luxury clothing and leather goods, generating 50 per cent to 55 per cent of global output.
Dior is one of the leading luxury brands in the world. Its elegant and sophisticated designs have made it a staple in haute couture and ready-to-wear collections. Over the decades, Dior has expanded its influence under the creative direction of notable designers like Yves Saint Laurent, John Galliano and Maria Grazia Chiuri, maintaining its legacy of elegance and modernity in the ever-evolving fashion industry.
