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Welcome to fashion’s marathon month of designer debuts! We’ve jumped right in with a big series on The Great Fashion Reset, unpacking all the challenges facing luxury’s biggest brands as they head into a high-stakes season. It includes some fantastic coverage from BoF’s best that I highly recommend you check out.
My piece focuses on how a series of Italian sweatshop scandals are helping to undermine the elevated image luxury labels trade off, and how big brands are trying to address that. Read on to go deeper into some of the reporting that didn’t make it into the story and to get a drill down on the big question: do luxury consumers actually care about the conditions in which their pricey products are made?
I’m also taking a look at one of this week’s weirder stories: the appearance of an ad that seemed to feature the face of Luigi Mangione (the man accused of killing UnitedHealthcare’s CEO in New York last year) on Shein.
As always, send me thoughts, feedback and tips.
Trust Issues
A few weeks ago, journalist and writer Sujata Assomull posted a video discussing “luxury ick,” a creeping sense that excessive price hikes, quality concerns and sweatshop scandals have made high-end brands that were once among the world’s most desirable, well, icky.
It’s an insidious problem for an industry whose most valued commodity is image. And as big brands prepare for this season’s creative debuts, they are also taking steps to try and shore up their credibility with consumers — and avoid any future reputationally awkward scandals.
You Get What You Pay For
In my reporting for this week’s story, it became clear that there are a few things that are beginning to change in the way the industry operates.
Brands are investing more in supply-chain management and operations, and they’re taking a tougher stance with suppliers on outsourcing to avoid the risk of subcontracting to unscrupulous workshops. New regulations are likely coming in to support the industry’s efforts to clean house.
There are signs that even the sourcing system that prioritises speed, flexibility and price above all else, creating the pressures that are undermining luxury’s value proposition to begin with, is beginning to shift.
While I was in Florence last week, I caught up with factory-owner Klajdi Koci for a coffee. We originally met last year, when I was reporting an investigative piece on how sweatshops ended up embedded in luxury’s supply chains. It was Koci who first taught me the phrase “Pulcinella’s secret,” an Italian idiom that describes something everybody knows, but doesn’t talk about. Back then, he was frustrated with fashion, fed up with trying to compete with unscrupulous players downmarket who undercut his prices.
But these days, he told me, he’s feeling more optimistic. Business is busy and he can afford to be choosy about his clients. The ones he intends to keep working with are becoming much more alert to the pressures facing their suppliers. He’s in the process of finalising a manufacturing agreement with a major Italian luxury label that will be linked to a guaranteed annual production volume, he told me. It’s the first time he’s been offered that level of certainty over orders for the year.
As for another client who wouldn’t consider a similar contract? “I gave them back the leather and metal accessories and waved them goodbye,” Koci told me over text when I followed up with him earlier this week.
The Bottom Line:
Ultimately, “it’s a pricing issue,” said Simone Balducci, the president for fashion, footwear, leather goods and furs at CNA Florence, a trade group representing small and medium-sized craft businesses, during a conversation on a quiet afternoon at his leather goods factory on the outskirts of Florence. “Whoever comes to Italy and brings the right price has no issue.”
Who Cares Anyway?
At this point, I’ve done a lot of reporting on luxury’s supply chain scandals and what they mean for the wider industry. One thing that remains frustratingly intangible is how much any of this is affecting big brands’ bottom lines.
This matters because money talks. If scandals aren’t hitting sales, brands are less likely to act to address them.
Virtue Signalling
I really enjoyed Perfect magazine editor-in-chief Bryan Yambao’s no-nonsense take on this last week. Luxury shoppers are in it for desire, status and identity, he wrote. Your average high-net-worth customer didn’t make their millions by getting too hung up on business ethics. If a product’s hot, a little hint of misconduct is unlikely to turn them off. “Most customers are not checking emissions reports or subcontractor audits at the till. They are responding to a brand’s aura,” he added.
Yambao recounted meeting a high-spending friend on a trip to Paris this summer, right after she’d dropped €75,000 ($87,000) in Loro Piana. He pulled up recent coverage detailing issues with labour exploitation in the brand’s supply chain. She shrugged: “That’s sad… but I really like Loro Piana, so whatever,” she responded.
On the other hand, I’ve had equally anecdotal conversations that tell a different side of the story. A luxury executive I was speaking to recently told me of an event he attended over the summer with an audience of around 100 high-net-worth individuals (“true old money rich people,” as he put it). They were pretty fed up with luxury brands that had raised their prices to crazy heights in a move the attendees felt was intended only to juice profits and milk shoppers while offering no additional value in return.
My take?
Luxury brands live and die by whether shoppers believe the image they project into the world. Anything that threatens that is dangerous, but just how much depends on how strong the image was to begin with.
If a product or brand is hot, the average shopper probably isn’t going to let a little twinge in their conscience about possible links to labour exploitation deter them from a purchase. But at a time when consumers are already turning to superfakes and premium labels that promise luxury-level quality at more accessible prices, scandals become much more risky.
As the president and CEO of luxury trade group Camera Nazionale della Moda Italiana, Carlo Capasa told me, if shoppers no longer see a difference between the way high-cost and low-cost fashion is produced, then “this is killer.”
Shein Did What?
On Wednesday, some very weird headlines started to pop up, blasting the news that ultra-fast-fashion retailer Shein was using the face of Luigi Mangione — the man accused of murdering UnitedHealthcare CEO Brian Thompson in New York last year — to sell shirts.
What Actually Happened?
According to Shein, the controversial image was uploaded by one of its third-party vendors and was rapidly taken down. The company said it was investigating how the picture ended up on its site and tightening up monitoring processes to ensure “stringent” listing standards are met.
Meanwhile, this is catnip for some of the weirder parts of the pop culture web. Mangione, who is awaiting trial for charges connected to Thompson’s December shooting, has become an unlikely folk hero in some circles. Online retailers like eBay and Etsy have previously been used to sell products bearing his name and likeness. Amazon has had to remove merch that appeared to be capitalising on the UnitedHealthcare executive’s killing.
Mangione has pleaded not guilty to the charges against him.
So What?
The response to the Shein incident has been the kind of gleeful outrage the internet town square specialises in, but for the fashion giant it’s mostly just more noise. Shein has much bigger issues to contend with, like its stalled IPO efforts, steep US tariffs and the €150 million ($175.61 million) fine French regulators handed it earlier this week for allegedly playing fast and loose with customer data (The penalty amounts to roughly 2 percent of the company’s European revenue and Shein has said it will appeal the decision).
Meanwhile, there’s plenty of speculation that the Mangione image was AI generated, adding a dark new twist to concerns about how machine-generated content might be used and highlighting the looming challenge online retailers will face to control the kind of content that appears on their platforms.
What Else You Need to Know This Week:
- Gel No: An EU ban on a key ingredient used in gel nail polish came into effect this week. The crackdown reflects potential safety concerns raised by studies on animals. Use in the US is still allowed. [The Cut]
- Brand Activism: British soap and bodycare brand Lush closed its UK stores, factories and website on Wednesday to protest Israel’s actions in Gaza. Lush is one of a handful of beauty brands to openly criticise Israel’s war, even as brand activism more broadly has dwindled. [The Business of Fashion]
- Power Moves: Chloé’s chief sustainability officer, Aude Vergne, has stepped down from the Richemont-owned brand after nearly a decade. [The Business of Fashion]
- Dulled Spark: Lab-grown gems are robbing Botswana of its diamond riches. The country is facing an economic crisis linked to the diamond market’s collapse, as lab-grown alternatives gain in popularity. [The Business of Fashion]
