By Emilio Parodi
MILAN (Reuters) -Italian prosecutors are seeking to place shoemaker Tod’s under judicial administration over alleged worker abuses in its supply chain, in the latest in a string of cases that have tainted the image of some of the biggest names in fashion.
Tod’s, which told Reuters it complies with the law, would be the sixth high-end brand to undergo such supervision in Italy since the start of last year.
The news of the investigation into the supply chain, not previously disclosed, came to light in a decision by Italy’s Supreme Court, reviewed by Reuters on Wednesday, to set a date for a hearing in a dispute between Milan prosecutors and a local appeals court over the matter.
TOD’S SAYS IT ABIDES BY CURRENT LAWS
In a statement to Reuters, Tod’s said it had been informed of the hearing next month but was unaware of any further details.
“We can only reiterate that Tod’s complies with current legislation, including labour law, and that constant checks are carried out on the workshops we select and use,” it said.
Before starting work for Tod’s, workshops sign agreements guaranteeing the quality of their employees’ work environment and compliance with labour contracts, it added.
Prosecutors allege Tod’s “culpably failed” to adequately oversee its suppliers in order to pursue higher profits. However, the company itself is not under investigation, with attention focused on cleaning up the supply chain.
The prosecutors went to the highest national court over a decision by the Milan court which, while considering their request for judicial administration to be well founded, had ruled that territorial jurisdiction in the matter lies with the Marche region, in central Italy, which is where Tod’s is based.
In order to determine who has jurisdiction to proceed, the Supreme Court has set a hearing for 19 November.
GOVERNMENT ACTS TO SAFEGUARD ‘MADE IN ITALY’ REPUTATION
Investigations by Italian magistrates have exposed widespread exploitation of workers in the fashion and luxury supply chain.
Responding to the case involving Tod’s, Italian industry minister Adolfo Urso said on Wednesday the government had put forward a bill to create legal certification of fashion companies.
Under the initiative, brands, including those targeted by legal actions, could obtain pre-emptive third-party certification of their supply chains’ legal compliance.
“With this measure, it will be possible to secure Italy’s fashion supply chain, a source of pride for ‘Made in Italy’, and protect its reputation worldwide,” Urso said, according to Italian media.
High-end Italian cashmere firm Loro Piana and units of fashion brands Valentino, LVMH-owned Dior, Italy’s Armani, and Italian handbag company Alviero Martini were previously placed under administration for alleged worker exploitation.
The earliest of these measures, regarding Armani, Dior and Alviero Martini, were lifted after the companies brought their practices into line with legal requirements.
L Catterton, a private equity firm backed by French luxury group LVMH, took Tod’s private last year in agreement with the group’s main shareholder, the Della Valle family.
SUBCONTRACTORS IN THE SPOTLIGHT
According to court documents, the case involving Tod’s regards subcontractors at the end of its supply chain, both in the Milan area and in the Marche region.
As with the other cases affecting luxury brands in Italy, this investigation began with inspections carried out by the Carabinieri police’s labour protection unit.
In the Milan area, from 2023 to 2024 Tod’s assigned the production of company uniforms for its sales assistants to a company with no production capacity, which subcontracted the work to another Italian company. It, in turn, subcontracted the production to two Chinese-owned factories, which were placed under investigation for worker exploitation following the inspection.
In the Marche region, Tod’s directly contracted two Chinese-owned workshops – one of which had subcontracted to another factory – for the production of uppers and other footwear components from January 2024 to January 2025.
In those workshops, inspectors found workers were paid on a piecework basis, resulting in a net hourly wage ranging from 2.75 euros ($3.20) to just over three euros, well below half of the 10 euros provided for in the national contract.
Workers also had 150 euros deducted from their monthly wages for accommodation and 100 euros for food, according to the court documents.
($1 = 0.8596 euros)
(Reporting by Emilio ParodiAdditional reporting by Elisa AnzolinEditing by Keith Weir, William Maclean)
