The luxury fashion sector is in trouble. Big, big trouble. For over two years, supply chain scandals uncovered in Italy have put an ugly face on a sector that normally tries to evoke glitz and glamour.
One by one, authorities launched investigations into big brands, as investigators found sweatshops and uncovered fully unacceptable labour conditions. Not in a remote part of the deeper levels of the supply chain, but right in the heartland, giving a bitter meaning to the proudly-claimed “Made in Italy” label.
Perhaps that is why the Italian justice system reacted so forcefully to the findings. As a result, several brands were placed under year-long administrative control. Brands also have been fined millions of euros for misleading social and environmental claims.
The reaction by the brands has been as predictable as one would imagine. “There were lapses in auditing,” “We need to step up our audits,” “We will diligently work on strengthening their code of conduct.” Familiar phrases, carefully crafted to sound responsible, but ultimately designed to deflect accountability and delay meaningful change.
Colour me a sceptic, but I’ve seen it all before. And I don’t believe this will end the crisis.
Over the past few decades, supply chains have gone global and in the process, increasingly opaque. Layers of subcontracting have blurred visibility and accountability. Relying on audits to manage this complexity has consistently failed to uncover (or fix) systemic problems. It’s long past time to try a different approach: openness by default, and by choice.
In a sector that is frankly obsessed with controlling the spread of counterfeits, it’s astonishing how little oversight many brands have over their own factories, where dupes might very well literally roll off the same production line as the originals.
The looking away is especially hard to swallow in these cases, where the abuses took place not in some faraway place, but right under their nose. A proper Italian lunch break provides ample time to hop in a cute stylish Topolino mini EV and visit these factories, right from the company headquarters.
More fundamentally, this lack of oversight relies on a worldview where your suppliers aren’t something to be proud of, to celebrate and showcase, but to control and potentially punish. That isn’t a good look.
Flaunt it, not hide it
What if luxury brands would take a radically different approach to supply chain transparency?
One that other sectors have long shown to be useful. I may not be a regular customer of luxury fashion brands, as their price point is ever-so-slightly above my NGO salary… but I do have a deep appreciation for other fine things in life, like good food and drinks.
And in those worlds, openness is part of the business culture. Customers expect to know where and how the product is made. Showing off your production locations is seen as a marker of quality and a cornerstone of trust. Over the years, I’ve toured whisky distilleries from Islay to Speyside, visited coffee plantations in Costa Rica, saw how fresh buffalo mozzarella was made on the slopes of Mount Vesuvius, and seen rice transformed into exceptional sake in Japan.
In fact, visiting artisanal food and drink production has become a slight obsession and a regular part of most of my travels. This has taken me to a very diverse range of places, from the rustic to the refined and sometimes sacred. Some had elaborate tours which you had to book in advance, others just casually allowed you to walk in.
Yet what all of them had in common: people who speak with genuine passion about what they produce there. People proud to showcase their skills, the artisanship, the quality of their raw materials, or even tell tales about the beloved old machinery and its quirks.
I usually leave these places entertained, enlightened, and (depending on the generosity of the tasting) sometimes a bit tipsy. But most of all, I depart with a deep respect for the people that make the product, and by extension, also the brand. A loyalty that stays, and that frankly beats anything advertising could do.
Why then oh why, do luxury brands in fashion insist on hiding their production facilities?
Exit through the gift shop
It’s not hard to imagine a different future. If a brand would honestly want to showcase the women and men working their magic on expensive fabrics and rare materials, I’m pretty sure there would be a massive interest to visit these facilities.
Of course, that would require the factories to be worth showing: clean, safe, and filled with workers who are treated and paid fairly. Let’s be honest: at the price points luxury goods command, that’s not an unreasonable expectation.
In fact, one of the challenges might be too much interest. A visit to the hallowed halls of an iconic brand might become an essential part of many vacations. Picture it: traffic jams, long lines, overwhelmed gift shops.
But then again, this is luxury fashion we’re talking about! Creating, handling and marketing artificial scarcity is the industry’s specialty. The earliest possible booking is for a dreary February morning in 2029? Congrats, you just made it more desirable! The factory is a bit out of the way? Perfect. That’s an opportunity to offer the full branded experience, including stylish eco-friendly travel and a sleepover in our branded hotel.
Think of the extra services you could provide: want a monogram added to that dress or a custom handle on that bag? Get it done on-site, for a fee.
Can’t show all parts of the factory because your super-secret new runway collection is made there? No problem! Drop some enticing glimpses, have big screens flashing texts like “Fuchsia is the new Brat”, up the theatrics by having impeccably groomed security staff in front of the Forbidden City parts.
A clever marketer could undoubtedly sell “pre-loved” unique items, meticulously restored and even upcycled by the original artisans, thereby proving their authenticity beyond any doubt.
Clearly not all parts of the supply chain make for trendy destinations. There is simply no Instagram-friendly way to turn a cow’s skin into leather, to point out the painfully obvious. Yet even there, honesty can shine. Disclose that your hides were not sourced from deforested regions of the Amazon. Other brands have shown that transparency and traceability can reach the farm- or even animal-level.
And when it comes to chemical use, a standard CSR disclosure might earn a mild yawn. But imagine this: you bottle up the “Now! Fully cleaned!” waste water from your dye facility, seal it in a custom bottle, and hand it out at your next runway show. Instant collector’s item, fetching fortunes on Ebay.
Just make sure you’re confident of that claim before handing the bottle to Anna Wintour…
Dare and bare
There is no real way for consumer confidence to return by sticking to the old playbook. Auditing, once the industry’s favorite fig leaf, has failed, across fast fashion and luxury alike. Why? Mainly because it focuses only on risk management and ticking boxes for compliance, not on actually delivering fair treatment for workers.
Worse still, audits are the embodiment of a worldview where workers, and suppliers, are seen as necessary evils. As risks, as liabilities, as problems to be controlled, not partners to trust.
The way forward? For fast fashion, it means engaging directly with workers and trade unions, tackling root causes by paying a living wage, and signing binding agreements that make those promises real. Mapping and publicly sharing the deeper levels of your supply chain on Open Supply Hub is a key step here. This isn’t a PR stunt; it’s the foundation of the ‘meaningful stakeholder relations’ that legislators and investors increasingly demand.
Luxury brands have their own path to redemption. To justify their price point, much of their production is located in well-traveled, easy to reach and popular destinations. They also rely on a notion of quality, but that image is wearing thin. More audits aren’t going to fix it, but radical transparency in all stages of production will.
And, given their brand recognition and following, they have the clear opportunity to turn that from mere ‘compliance’ into an experience. Quite possibly even a profit-making one, but at least one that builds stronger bonds than glossy advertising. Who knows, one day we may see five-star ratings of factories on opensupplyhub.org from enthusiastic visitors 😉
Pro tip: this only works if you go all-in. As a certain ultra-fast-fashion brand recently learned, inviting influencers to a single swanky show-off location while hiding the rest of your facilities is a recipe for disaster.
So celebrate your workers. Pay them well. Show off your locations, all of them, and start treating transparency as something you just love to do. Because you have absolutely nothing to hide. Now wouldn’t that be the hallmark of real luxury?
