Bernard Arnault, CEO of the €85 billion LVMH behemoth, has been called many things—“the wolf in cashmere,” “the tastemaker’s king,” “a genius of global luxury.” His rise to the top of Europe’s rich list has been chronicled with breathless awe: The New York Times praised his “commercial instincts,” Business of Fashion dubbed him a “maestro of consolidation,” and investors everywhere toast his empire-building acumen.
But what looks like brilliance from the outside is, in fact, a masterclass in engineered authenticity. Dior, Fendi, Givenchy, Bulgari, Berluti, Loewe, Celine, Louis Vuitton et al.—once fiercely independent houses of artistry, experimentation, and identity—have been reduced to Strategic Business Units in a vast, profit-seeking machine. It’s a hollow kind of luxury: selling exclusivity en masse—under the pretense of the old, idiosyncratic maisons.
Deception number one is the illusion of authenticity.
Deception number two cuts much deeper.
Like other Italian fashion houses, LVMH has taken full advantage of a regulatory loophole that allows garments sewn by low-paid Chinese labourers on Italian soil to qualify for the coveted “Made in Italy” label. Factories have sprung up in Prato, Tuscany, where workers churn out handbags and dresses for luxury giants under punishing conditions—often without contracts, protections, or even legal status.
Milan’s public prosecutor, in a recent filing related to the Dior case, stated: “An illegal practice has emerged so entrenched and proven [that it could] be considered part of a broader business policy exclusively aimed at increasing profit.”
Fabio Roia, president of Milan’s court system, asked the question luxury execs wish no one would ask: “Why does it cost so little to manufacture the product?” N.B. Dior paid €53 for a handbag that sells for €2,600.
LVMH-owned Loro Piana was placed under court administration for failing to supervise its supply chain and using illegal subcontractors. The court found that the brand: “Culpably failed to adequately oversee its suppliers in order to pursue higher profits.”
Luca Tescaroli, head prosecutor in Prato, described the region as: “Characterized by a criminal complexity and danger,” with documented mafia infiltration and “brutal aggressions” against protesting workers, including 13-hour shifts and €3/hour wages.
The most galling part? This wasn’t some desperate move to stay afloat in a cutthroat market. These companies operate with obscene margins, dominant market share, and practically no serious competition at the high end. They could easily afford to uphold the values they preach: craftsmanship, dignity, heritage—but chose profit over principle instead.
There’s an old Gaelic proverb:
“Lompaich cus faisg air a’ ghrèin, loisgidh i do dh’iteagan.”
(Fly too close to the sun, and she’ll burn your feathers.)
Now that they've been caught, suddenly it’s a chorus of not us, we had no idea, this was a subcontractor. The same people who micromanage brand identity down to the scent in their flagship stores now claim plausible deniability. No one is convinced.
The luxury industry has always trafficked in fantasy. But this fantasy—of ethical heritage, of artisanal care, of national pride—is fast unraveling.
If you’ve been reading along, you might recall our previous post On Comeuppance. This is that moment. The emperor still has clothes—but now we know who stitched them.
Certain kinds of people will go on buying luxury like it’s oxygen—a crutch for self-worth, a shortcut to status, a fast pass to validation. They’ll whisper Made in Italy like it’s sacred scripture, even as the truth seeps from the seams.
Any thinking person will ask: Why pay homage to these bastards?
