Italy Court Lifts Controls on LVMH’s Dior Italian Unit Following Labor Practice

An Italian court has lifted the special administration regime previously imposed on Manufactures Dior SRL, an Italian subsidiary of luxury conglomerate LVMH. The decision, announced on February 28, 2025, follows a review of the company’s labor practices and corrective measures implemented in response to allegations of worker exploitation.

Background of the Case

Manufactures Dior SRL, a key production hub for LVMH’s Dior brand, came under scrutiny in mid-2024 when Italian authorities identified labor violations within its supply chain. The investigation revealed concerns regarding subcontracting practices and potential worker exploitation, prompting the court to place the company under special administration. The measure was intended to ensure compliance with labor regulations and improve oversight of supplier relations.

Court’s Decision and Corrective Actions

Following months of internal restructuring and regulatory compliance efforts, the Italian court determined that Manufactures Dior SRL had successfully implemented the necessary organizational reforms. These included enhanced supply chain monitoring, stricter subcontractor accountability, and improved working conditions for employees. As a result, the court ruled that external oversight was no longer required.

In a statement, LVMH reaffirmed its commitment to ethical labor practices and regulatory compliance, emphasizing that Dior and its subsidiaries operate under strict internal guidelines aligned with industry standards.

Industry Implications

The decision marks a significant development in the luxury fashion sector, where labor practices have come under increased scrutiny. Regulatory bodies across Europe continue to examine labor conditions in high-end fashion manufacturing, particularly concerning outsourcing and subcontracting arrangements.

LVMH’s successful resolution of the issue highlights the importance of proactive compliance measures and corporate responsibility in the luxury industry. Moving forward, the case may serve as a precedent for other brands facing similar regulatory challenges.

Conclusion

With the court lifting restrictions on Manufactures Dior SRL, LVMH’s Dior unit can resume normal operations in Italy. This ruling underscores the growing need for luxury brands to maintain stringent oversight of their supply chains to ensure compliance with labor laws. As regulatory scrutiny intensifies, companies will likely continue strengthening their labor practices to align with evolving legal and ethical standards.