Dior strengthens factory control after handbag scandal

Dior announced the opening of a new industrial division in recent days, aimed at vertically integrating its in-house production structure following the scandal involving handbags, when Italian authorities discovered that some of its handbags were being produced in illegal sweatshops to which the production had been outsourced through a series of dubious contracts. The new division is expected to focus on more rigorous supply chain control and to commit to ensuring the continuity of its artisanal know-how. The damage to the brand's reputation, when in early 2023, the Italian Competition Authority opened an investigation into companies connected to the brand that had outsourced the production of bags to illegal sweatshops, which were then sold with astronomical markups, was significant. We do not know how much this actually impacted the brand's sales, especially during this period of widespread crisis, but the news had a strong impact in the trade press, which seemed more affected outside of Italy than within it. It is likely that the incident has accelerated Dior's commitment towards in-house production, with the goal of protecting not only the brand's image but also the workers involved in the production processes.

The new industrial department will be responsible for strengthening Dior's production capacity in the long term, overseeing every phase of its product creation, from design to distribution, and ensuring optimal working conditions for all those involved in creating Dior products. The goal is not only to increase efficiency but also to preserve high-quality craftsmanship and avoid unpleasant scandals caused not directly by the brand but by a policy many branches of the brand adopt, which involves outsourcing and subcontracting production to third-party companies where checks are often not rigorous. To lead this new initiative, Dior has appointed Giorgio Striano as Chief Industrial Officer. Starting January 2, Striano will be responsible for all industrial activities and will report directly to Delphine Arnault, the brand’s President and CEO, as well as the daughter of Bernard Arnault. With years of experience as Chief Operating Officer at EssilorLuxottica and Luxottica, Striano brings extensive expertise in managing industrial operations on a global scale. Another key hire is Nicolas Carré, who will be the industrial director for leather goods, footwear, and jewelry and comes with two decades of experience at Louis Vuitton.