Dior, a renowned French luxury fashion house, has come under scrutiny after an investigation by Italian prosecutors revealed that the brand pays a fraction of the retail price to produce its high-end handbags. Founded by Christian Dior in 1946, Dior is celebrated for its fashion, accessories, fragrances, and beauty products, often flaunted by celebrities worldwide.

According to a report by The Wall Street Journal (WSJ), Dior pays its suppliers just 53 euros (Rs 4,778) per handbag. These bags are sold in stores for a staggering 2,600 euros (Rs 2.34 lakh). The investigation also uncovered similar practices by another luxury brand, Giorgio Armani. Armani's bags, purchased from suppliers for 93 euros (Rs 8,385), are resold to the brand for 250 euros (Rs 22,540) and eventually priced at around 1,800 euros (Rs 1.62 lakh) in stores.

Dior bags cost
Image Source: DIOR

These Dior bags cost do not include expenses for materials like leather or additional costs for design, distribution, and marketing. Despite the findings, Italian prosecutors have criticized the luxury brands for inadequate oversight of their supply chains but have not filed any charges.

While Dior has not replied to the report, Armani has stated that it has "control and prevention measures in place to minimize abuses in the supply chain" and is "collaborating with the utmost transparency with authorities," according to WSJ.

Italy is a significant hub for luxury clothing and leather goods manufacturing, home to thousands of small manufacturers. Consulting firm Bain estimates that Italy produces 50 to 55 percent of the world's luxury fashion items.

Dior remains a leading luxury brand globally, known for its elegant and sophisticated designs. The brand has maintained its legacy of elegance and modernity in haute couture and ready-to-wear collections under the creative direction of notable designers like Yves Saint Laurent, John Galliano, and Maria Grazia Chiuri.

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