Luxury brands, cheap practices: fired garment workers abandoned by leading fashion houses

An investigation by Italian outlet, Internazionale, published today, highlights the plight of over 150 garment workers in Romania, who were denied compensation by Dior, Gucci and Tod’s, after suddenly losing their jobs in 2023. 

‘I became depressed, not knowing how I will pay my bank credit and support my child,’ says Maria*, one of the women formerly employed at the Selezione garment factory in Brașov.

These fashion houses cancelled their contracts with the Selezione factory, after an increase in the national minimum wage in January last year. This increase followed a lack of orders from Dior, Gucci and Tod’s, as a result of which the factory was forced to shut down, leaving the workers without severance or support. 

Violeta Radu, who founded Selezione, states “we were always loyal and available. We satisfied their requests, even when they asked for very quick orders. Then they gradually lowered their purchase prices and effectively threw us out of the market.”

On behalf of the workers, the brands were contacted in writing by the Clean Clothes Campaign. Thus far, they have failed to ensure that the workers are compensated. Furthermore, none of them have adequately explained what led to the termination of their orders at the Selezione factory. In an evasive reply to the CCC, Gucci stated that the EU’s due diligence directive is not yet applicable to the company, whilst emphasising the need for supply chains to be “flexible”. Meanwhile, Dior reassured of its commitment to labour law, claiming that orders were revoked due to “actual production needs”. Tod’s did not reply to our correspondence, but its CEO allegedly told the factory owner that their costs “are far above our standards, and production planning, not me, has decided to make the pairs that you said you could not produce elsewhere.” 

Notably, the Romanian minimum wage falls well below the living wage and, yet, luxury brands seem to think it is already too high. According to trade unionist, Daniel Năstase, luxury brands are becoming increasingly disinterested in producing in Romania. Numerous factors are potentially at play, “in particular, the increase in the minimum wage”, he says. 

This case supports recent research by the CCC, revealing the widespread nature of unfair purchasing practices across Europe, including by luxury brands. It is also the latest in exposures of worker exploitation in the luxury sector. Earlier this year, an investigation by the Italian authorities revealed sweatshop-like conditions in a factory producing bags and accessories for Dior. 

As always, the Clean Clothes Campaign urges the brands to work with the workers’ representatives and ensure compensation is paid as swiftly as possible. 

For more details on this case, contact Priscilla Dudhia at priscilla@cleanclothes.org (+44 7869 147 248)

*Name has been changed to protect identity.