MILAN (Reuters) - An Italian court on Friday placed under judicial administration a company owned by Italian fashion group Armani, accused of indirectly subcontracting its production to Chinese companies that exploited workers.
The court in Milan ordered a one-year receivership for Giorgio Armani Operations, described as an industrial company of the Armani Group, according to the ruling seen by Reuters.
It said Giorgio Armani Operations had entrusted the production of its bags to two firms that subcontracted the work to four Chinese companies which paid their workers 2 to 3 euros ($3.25) per hour.
Armani Group said in a statement it had "always had control and prevention measures in place to minimise abuses in the supply chain," adding it would work with the authorities to clarify its position.
The Milan public prosecutors' office has for years been investigating the outsourcing of production by large groups in the fashion and other industries to subcontractors who allegedly exploit workers.
The fashion company Alviero Martini, which had its bags produced by external Chinese workshops, was recently placed under judicial supervision.
With its tradition of sophisticated craftsmanship, Italy is home to thousands of small manufacturers that cover 50-55% of the global production of luxury clothing and leather goods, consultancy Bain calculates, against 20-25% for the rest of Europe.