“Given the product prices” demanded at the tippy-top of the high fashion totem pole, “there is a sense that the luxury brands must be doing it right,” Michael Posner, a professor of ethics and finance at the Stern School of Business at New York University, told the New York Times recently. That, however, is not necessarily the case. Reflecting specifically on the “scores of ateliers and export houses [in Mumbai that] act as middlemen between [high fashion] brands and highly skilled artisans,” the Times found that contracted and sub-contracted “embroiderers still complete orders at unregulated facilities that [do] not meet Indian factory safety laws,” and similarly run afoul of a secretive pact entered into by some of the biggest names in fashion.
As it turns out, behind the embroidery that can be found on runway garments and accessories from the likes of LVMH Louis Vuitton Moët Hennessy and Kering, which respectively own Louis Vuitton, Christian Dior, Celine, Loewe, and Givenchy, among other brands, and Gucci, Saint Laurent, Balenciaga, and Bottega Veneta, just to name a few, is a quiet contract, albeit one that is not legally binding. As the Times’ Kai Schultz, Elizabeth Paton and Phyllida Jay revealed on Wednesday, in 2016, the aforementioned conglomerates, along with Burberry and Mulberry, “introduced the Utthan pact, an ambitious and secretive compliance project aimed at ensuring factory safety in Mumbai and elevating Indian embroiderers.”
The timing of the luxury-level agreement is hardly without context. The pact came into fruition in the wake of the collapse of the Rana Plaza factory complex in Dhaka, Bangladesh, a tragedy that claimed the lives of 1,132 garment workers and injured even more. “Nervous about their ties to India, a country known for weak worker protections, where building collapses and factory fires regularly kill and maim garment workers,” luxury brands looked to a voluntary solution, and the Utthan pact was born. (You can read the full Utthan pact on the New York Times).
The terms of the inherently under-wraps agreement – which is “managed by Impactt, a consultancy in London” – require that “every Indian subcontractor employed by signatories would be required to show progress in providing health and pension benefits to artisans,” work weeks be limited to six days, work days be no more than 11 hours – “in line with the legal limit,” per the Times – and “all factories [be equipped with] fire extinguishers, [and] a separate room for workers to sleep in.”
As for compensation, the agreed-upon “salary [is] about $225, including benefits.”
In many ways, the Utthan pact has proposed “sweeping changes to Mumbai’s factories by standardizing wages and improving workplace safety,” according to the Times, even if no one outside of the ranks of the luxury brands’ teams and their supplier partners had really known about it until now; the pact, itself, has not been broadcast by way of press releases or even noted in the luxury groups’ “annual reports or corporate and social responsibility platform.”
The effort – in connection with which the Times observed improved safety measures in certain factories and Impactt reports that the number of individuals with employment benefits is up – is not without issues, of course. The founder of one Mumbai embroidery firm that works with Chanel, Hermès and Isabel Marant, for example, told the Times that the salaries mandated by the pact are “too low,” noting that he pays “his embroiderers up to 50 percent more than [the pact’s] wages.” Others pointed to ongoing retaliation in connection with their attempts to unionize. And, just as is common when it comes to the enduring cost-cutting demands frequently linked to fast fashion giants in the business of selling high volumes of low-priced garments and accessories, and their well-established pattern of regularly switching factories in search of often-unfathomably low costs, high fashion is not immune to price pressures even in the context of the pact.
“The brands say, ‘You need to be cheaper. You need to be more competitive. You might lose orders next season,’” Maximiliano Modesti, the founder of Mumbai-based embroidery firm Les Ateliers 2M, told the Times. Unsurprisingly, such demands for lower prices routinely cut into companies’ oft-expensive efforts to improve the conditions of their operations, thereby, serving to reward the suppliers that do the least.
Looking beyond the specifics of the conditions in Mumbai, one of the most striking issues at play is the level of secrecy that abounds, and not just in regards to the pact, itself, but in connection with high-end brands’ manufacturing more generally. As the Times aptly notes, it is relatively “unknown to most consumers [that] the expensive, glittering brands of runways in Paris and Milan also indirectly employ thousands of workers in the developing world” – and even in their home countries, albeit in conditions that most consumers would not expect – not terribly unlike the way that their fast fashion counterparts do.
The difference here is primarily one of perception, as driven by prices and marketing investment. Most fast fashion companies have focused almost exclusively on the numbers, building mammoth-sized businesses based on a low cost, high volume model. As such, they are not in the business of constructing a dense façade when it comes to their products and their manufacturing, which is a large part of why they are easily pin-pointed for abuses in supplier factories in far-flung locales like Bangladesh and Myanmar, as well as those as close to home as Los Angeles, if recent findings about the workings of ultra-fast fashion brand Fashion Nova is any indication. Their dirt-cheap prices certainly do not help put a glossy sheen on the ugly reality. How, after all, can a pair of jeans be made in an ethically-sound capacity if they bear a retail price tag of $20?
On the other hand, luxury players have far more to point to and benefit from when it comes to the ethos of their brands. They have expensive products, which, in the minds of many consumers translate directly to higher quality products and higher quality labor standards. They also have decades – and in some cases, more than one hundred years – of carefully curated (and very expensive) story-telling efforts and craftsmanship-centric marketing to thank for the general belief that all of their wares are produced by brand-employed artisans, working in pristine conditions. Taken together, such messaging enables brands to maintain their status as luxury players and to command prices that match such storied positions in the market.
More than that, they benefit from the traditional definition or understanding of luxury, which the late Vogue Italian editor-in-chief Franca Sozzani described in 2011, saying, “Craftsmanship is luxury. A product is luxe when it is handmade, tailored for few. Luxury meaning exclusiveness.” Former CEO of Louis Vuitton Vincent Bastien, had a similar take in his “24 anti-laws of marketing” strategy, stating, “For most people, luxury is the last word in hand-crafted or craftsman-built products.” While many of the market’s most well-known luxury brands now operate more as mass-market entities that churn out billions of dollars’ worth of logo-laden garments and accessories each year, they have traditional luxury backgrounds – that in many cases link them to family-owned workshops tasked with hand-crafting leather goods and other luxury products.
One of the most significant results of this larger aura of luxury, which has endured even as the reality of their manufacturing has changed over the years, is that these brands are, as Posner puts it, largely “immune to public scrutiny” when it comes to labor standards and their suppliers.
As for what is routinely left out of this narrative: it is that in much the same way as fast fashion entities outsource the manufacturing of their products to third-parties (who, in turn, enlist contractors and subcontractors), most high fashion and luxury brands do, too, since while many maintain self-owned and operated factories, few of them boast a large enough physical network of factories to produce the quantities they require. This reliance on third parties is generally obscured by brands’ messaging, much of which centers on heritage and the history of utilizing in-house manufacturing.
It is worth noting that the myth of luxury manufacturing is helped in large part by favorable labeling rules in European fashion capitals, which enable products that were made outside of these countries to still bear a coveted “Made in Italy” or “Made in France” label in many cases. Because the country of origin for labeling purposes, according to the European Union’s rules of origin, is where the final production process is carried out and does not take the national origin of the craftsmen, these big brands are in the clear legally even if they products are largely created elsewhere.
Even with all of the foregoing in mind, it becomes clear that the iron-clad distinction between the manufacturing practices of those at the opposing ends of the fashion spectrum is likely not as distinctive as it once was. Or as Posner says, “Despite the price tags for luxury brand goods, the conditions in factories across their supply chains can be just as bad as those found in factories producing for fast fashion retailers.”
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