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2024년 7월 23일

저자:
Helen Reid and Mimosa Spencer, Reuters

Italy: Investors demand LVMH take 'more aggressive' steps to monitor suppliers' treatment of workers after investigation finds 'sweatshop-like conditions'

"Some LVMH investors demand change after probe into alleged sweatshop-conditions at Dior contractors", 23 July 2024

Europe's top asset manager Amundi and other LVMH investors want the $370 billion luxury behemoth...to take more aggressive steps to monitor its suppliers' treatment of workers after Italian prosecutors disclosed alleged sweatshop-like conditions at subcontractors for high-end brand Dior, three investors told Reuters.

The investigation into suppliers for LVMH's second-largest fashion label, which Reuters revealed on June 11, has shone a spotlight on potential worker exploitation in the $1.6 trillion global luxury goods industry.

Amundi, which holds a 0.6% stake - worth $2.2 billion - in the Paris-listed parent to brands including Louis Vuitton and Tiffany & Co., said it contacted the French conglomerate after the investigation was made public, asking for more transparency on supplier audits and internal purchasing practices.

CCLA Investment Management, another LVMH investor, told Reuters it wants the company to provide more public evidence of its efforts to ensure workers in its supply chain are fairly paid, while asset manager Robeco said it has been pushing luxury groups including LVMH to be more transparent.

Reuters spoke with four investors holding shares in LVMH after a Milan court placed an Italian subsidiary of Dior under judicial administration following the investigation into the supply chain of Dior and a dozen other fashion brands.

Flavio Cereda, co-manager of GAM's luxury brands investment strategy, said while he did not see the probe as a “deal-breaker” when it comes to owning shares in LVMH, it is now no longer enough for brands to say a product is made in Europe and that they need to show they are “on top of (their) supply chain because in the end it falls on (them).”...

Dior said last week it has cut ties with the suppliers in question, that they were only partially assembling leather products and that reports of bags produced at "ridiculously low" costs were among "entirely false" information relayed by the media. Dior's profit margin is "entirely in line with that of the luxury industry and nothing of the order indicated by these erroneous comments," the label said. LVMH does not publish detailed figures about the financial performance of Dior or its other individual brands.

An LVMH spokesperson told Reuters the French conglomerate updated its supplier code of conduct in March and is working towards a homogenous approach across all its brands, but that the size and complexity of the group, which spans spirits to high-end hotels, mean this process is lengthy and challenging.

"This is a process of continuous improvement," the spokesperson said......

"We understand their impatience, we are mobilized to move as quickly as we can," the LVMH spokesperson said of investor requests...

Dora Buckulcikova, lead portfolio manager at the Robeco Fashion Engagement fund, also an LVMH shareholder, told Reuters luxury brands have blind spots when it comes to "suppliers of their suppliers," resulting in "not enough knowledge about where these are based and how they are audited".

Robeco routinely pushes luxury companies including LVMH to publish more information about their suppliers, and to ensure factory audits are unannounced, Buckulcikova said.

Dior said it had audited the suppliers that prompted the probe but they had "evidently succeeded in hiding these practices". "The Dior teams are working intensely on ongoing reinforcements of the existing procedures," it said...

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