An urgent court order in Milan has shifted Valentino Bags Lab Srl, the division that manufactures Valentino-branded handbags and luggage, into year-long judicial administration. Judges said the company “culpably failed” to monitor workshops that abused staff and stripped safety devices from machinery, choosing profit over oversight.
The ruling arrives just ten months after Kering purchased a 30 percent stake in Valentino, with an option to buy the rest by 2028. While the parent brand itself faces no criminal probe, the court’s decision installs an external administrator whose sole task is to verify that supply-chain controls actually work. That layer of supervision matters for investors: Kering’s own code of ethics promises “zero tolerance” on labor abuse, and Europe’s incoming Corporate Sustainability Due Diligence Directive will hold financiers accountable for the same failures now recorded in Milan.
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Investigators documented a production chain that paid Chinese-owned contractors as little as €35 per bag while identical items appear in stores for €1,900–€2,200, Reuters has reported. Police found employees sleeping beside sewing machines so that “manpower remained available 24 hours a day,” and electricity data confirmed round-the-clock production during holidays.
Previous interventions against Dior, Armani and Alviero Martini ended early after firms installed credible compliance systems. Valentino Bags Lab could follow, but each month under court control complicates Kering’s pathway to full ownership: the French group must now demonstrate that its future subsidiary can meet ESG metrics investors treat as table stakes rather than branding extras.
Bain & Company estimates that small manufacturers across Italy produce more than half of global luxury goods. That dense web of micro-suppliers delivers agility, yet gaps in oversight allow illicit dormitory factories to flourish. Flavio Sciuccati of The European House–Ambrosetti warns that repeated scandals “tarnish the Made in Italy prestige” and risk pushing conscious consumers elsewhere.
The administrator will audit payrolls, equipment safety and subcontracting contracts. If Valentino Bags Lab meets every benchmark, the court may lift supervision ahead of schedule, mirroring the Dior precedent decided last year. Until then, the case stands as a stress test for luxury’s preferred production model and a live reminder that brand equity now hinges as much on factory floors as on catwalks.
