Dior Bags That Cost $57 To Make Are Sold For $2800 (Is Luxury The New Fast Fashion?)

Two Italian luxury giants pay just a small amount to produce handbags that retail for thousands of dollars, according to documents in a sweeping investigation of subcontractors.
Italian prosecutors in Milan investigated the LVMH subsidiary Dior's use of third-party suppliers in recent months. Prosecutors said these companies exploited workers to pump out bags for a small fraction of their store price.
Citing documents examined by authorities, Reuters reported last month that Dior paid a supplier $57 to produce bags that retailed for about $2,780. The costs do not include raw materials such as leather.
The relevant unit of Dior didn't adopt "appropriate measures to check the actual working conditions or the technical capabilities of the contracting companies," a prosecution document said, according to Reuters.
In probes through March and April, investigators found evidence that workers were sleeping in the facility so bags could be produced around the clock, Reuters reported. They also tracked electricity-consumption data, which showed work was being carried out during nights and holidays, the report said.
The subcontractors were Chinese-owned firms, prosecutors said. They said most of the workers were from China, with two living in the country illegally and another seven working without required documentation.
The probe also said safety devices on gluing and brushing machines were removed so workers could operate them faster.
LVMH didn't immediately respond to a request for comment from Business Insider sent outside regular business hours. Court documents showed that Dior submitted a memo highlighting its supply-chain improvements, The Wall Street Journal reported Tuesday.
The probe also extended to Giorgio Armani contractors, and the luxury company was accused of not properly overseeing its suppliers.
Armani paid contractors $99 per bag for products that sold for more than $1,900 in stores, according to documents seen by Reuters.
A spokesperson for Armani Group told BI in a statement after publication that it is collaborating with the authorities.
"The company has always had control and prevention measures in place to minimize the risk of abuses in the supply chain," the statement said.
Judges in Milan have ordered units of both companies to be placed under judicial administration for one year. Reuters reported earlier this year that they'd be allowed to operate during the period.
A regular manufacturing practice
The prosecution said violating labor rules was a common industry practice that luxury giants relied on for higher profits.
"It's not something sporadic that concerns single production lots, but a generalized and consolidated manufacturing method," court documents about the decision to place Dior under administration said, according to Reuters.
"The main problem is obviously people being mistreated: applying labor laws, so health and safety, hours, pay," Fabio Roia, the president of the Milan Court, told Reuters earlier this year. "But there is also another huge problem: the unfair competition that pushes law-abiding firms off the market."
Last year, LVMH had 2,062 suppliers and subcontractors and undertook 1,725 audits, according to its environmental- and social-responsibility report.
LVMH CEO Bernard Arnault is the world's third richest person, according to the Bloomberg Billionaires Index. His daughter, Delphine Arnault, is the CEO of Dior.
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[@mind-of-neo]

That's called evil. That's called greed. I won't support it

[@KD-dc2fd]

I feel you on sewing my own clothes. I am a knitter so when winter tiles around if I see a piece in store that can be hand knit, I take a picture of the item then replicate it at home with the materials I have collected over the years. It takes longer yet the yarn is still less expensive than buying retail and I enjoy the meditation of creating my own garments. Great topic!

[@ambds1975]

Plus when we knit our own stuff, we can make sure it's in a fiber/color/fit that we like.

[@KD-dc2fd]

@@ambds1975 exactly! I’m always altering what I see in stores to fit me if I really want customization which I feel is part of the appeal for luxury or at least was back in the day.

[@ambds1975]

@@KD-dc2fd Yes! Off the rack 'luxury' is such a weird concept to me.

[@katy3mpress]

Each year from 2018 - 2021, I would treat myself to something from Emilio Pucci. The print execution was perfect. Since the Pucci family sold their remaining shares to LVMH, I have noticed a decline in print quality. Most of what I now see online has obvious out of register printing flaws, yet the prices remain the same. It’s sad to see what LVMH is doing to these fashion houses.

[@youngandrestlessjean3634]

I know. SO TACKY. Luxury used to mean top tier and lvmh has slowly cheapend it to basic mall level crap. It doesn't seem like they're the only ones either.

[@miaomiaou_]

There is a reason why Bernard will Bernard Arnault is the richest in the world. He's been watering down craftsmanship in favor of high margins since the 90’s 😭

[@davidpachecogarcia]

Designer>Luxury. The label of “luxury” in fashion is also becoming an oxymoron. More than ever it’s evident that you’re paying for the label and flaunt that you can spend more money than the average person. I also believe in going to a brand for unique items that you can’t get anywhere else.

[@ambds1975]

It baffles me how companies can just charge more money for cheaper, worse goods, depending on the name to keep product moving, and people... just believe they aren't doing that? Why would anyone believe them?

[@Coastpsych_fi99]

It’s because consumers will keep buying into the marketing and the status and fantasy of the brand.

[@ambds1975]

The industry promulgates poor consumer education by leaning into the aspirational lifestyle marketing on social media. :(

[@mrandmrscorona8658]

My Ted Baker stuff is better made structurally that my Gucci and Louis stuff.

[@user-se4bg9bp1b]

Back in the 90’s all the foreign students from China would tell us all about the cheap clothes available to them, like t shirts for a £1. They were talking about high end clothing that we paid a minimum of £40 for (in the 1990’s). I would not be surprised if the Dior bag cost £1 to make and the rest of the cost was expenses for everything else. It explains why so many high end brands give so much stuff away to Hollywood/social media celebrities, otherwise they would be bankrupt by now, wouldn’t they? Special machines!!!🤣🤣🤣

[@FashionRoadman]

Huge thanks to Tarik for donating during the stream!

[@lunallena5594]

The joke is in those luxury consumers.

[@Flaubert]

Thank you for making this! The industry is literally the Emperor's new clothes. I am buying vintage bags from the 80s and 90s and not new ones. The product value is much better

[@theorderofthebees7308]

Where can buy luxury bags from the 1980s and 1990s

[@spangol87]

Shut up - 57 to make?????? I knew there was a mark up but that's obscene man.

[@bennefib]

Owning alot of fashion really be like " thank you for sacrificing youre time, energy and possibly youre morality to obtain this money, now you can afford to buy things that holds the same value as normal things but with twice the creativity 😉

[@tdne2508]

Well I better be able to get the saddle bag for 200 dollars 😂

[@Bebe-de6hk]

Sewing is a great hobby. I make patterns and sew a lot of my own clothes. It’s fun / challenging to come up with something and try to figure out how to make the pattern and then in what steps to sew it. and what fabric works best to. Achieve the look you want. Sometimes I’ll also just see something like a Versace blazer that I absolutely can’t afford and I’ll just make it myself. I’m always obsessed with how clothes look on the inside. Sewing makes you notice all the little details

[@moomin7414]

How luxury lost its luster>>> I even went to Piccadilly Waterstones and bought the last book, when I traveled to London early this year 😩

[@sophiaaldous3199]

So many creative fields get butt hurt over criticism these days, as if they are above people having opinions about their work. Are people rude sometimes? Yes. Do some people make uninformed opinions? Absolutely. But your creative output is not above criticism, and to put people down for it is to imply that one is above any scrutiny whatsoever. (I love your channel, keep doing your thing).

[@JeneanZ_ChicConfidence]

This is not surprising. $57 is probably $50 more than the cost to make the average fast fashion bag.

[@Coastpsych_fi99]

Not to mention the branding, renting expensive locations and the wrapping etc. Obviously overpriced and terrible if they aren’t paying people fairly.

[@zeap8]

Please Make a brand quality tier list/ just overall brand tier list.

[@theorderofthebees7308]

I think some of the reason why poorly constructed clothes , and bags are flooding the market without much fanfare -is because their is a sizable population that doesn’t know how to sew and are not aware of what a well made garmet, should contain buying a dress and it out a lining - improper stitching etc etc and it puts out there for purchase . When folks begin to sew more again , they will have to step up their craftsmanship

[@gracied.3599]

Great content, as always! Thank youuuu sir!

[@moomin7414]

I’ve been waiting for this video

[@modelingsucks]

I love your insights in fashion. Could you perhaps do like a ranking in quality of the major brands? I recently bought a ysl silk shirt, wore it once for a party, got it back from the drycleaner and it looks so fucked up already =/. Now I'd like to buy a jacket from Loewe, but I don't know if it is worth it, and I really wish there were someone knowledgeable to give us a "quality approval" before I even cogitate buying something. The only brands so far I have zero complaints are bottega and dries van noten (although it is not always that dries uses natural materials, but pricewise I find it ok)

[@mochimochi3373]

I read that book back in 2007 need to reorder!

[@rockymodzdiy]

The rent in those 3rd world countries are like $200 a month, so they making what seems to be good money over there, but fools over here paying they rent which is around 2k for the bag. It’s some crazy arbitrage going on

[@distinctlydri2831]

Agreed. These bags used to be made by hand. Now they are mass produced and the leather quality has decreased.

[@julienguyen4436]

Replying fr SF. Hey thanks for the stream. Have you heard of youtuber Tanner Leatherstein? He breaks down lux handbags & his videos are informative. I cringe & think twice when I am considering getting anything expensive now. lol

[@FashionRoadman]

Yes, I love his channel. It’s great that he’s decoding the luxury industry.

[@simplynellstinystudio]

I watch him too. It really changed my perspective and forced me to do a self analysis.

[@ouzsnfouaenxfgfgsgsuhoauvdjd]

And they keep raising prices, so greedy. And all these brands put on this facade that they “care about the environment” to cover their asses

[@moomin7414]

1:23:52 that’s crazy because I love long form content. Some people don’t understand that there are different types of content.

[@Andrew_Lewis]

But this has been going on for years and we all know this so I'm at a loss to understand why people are shocked.

[@Coastpsych_fi99]

Thanks for making a video and this is a stark reminder of the greed in the world.

[@Orion126126]

Don’t tell people how much soda costs to make vs how much it’s sold for.

[@raeleohana8797]

$36 in 1973 would have the same buying power as approximately $246.32 today, based on the Consumer Price Index (CPI) data. So it’s a lot more but still not a justifiable current price.

[@moomin7414]

1:26:11 I love listening to the livestreams the next morning. Especially on my way to work.

[@AonAon-ip2lr]

That is a tactic for sale. Make your product so exclusive you burn it. It's done in vehicles back in 80s in America.

[@traceyreneerivera-fernande6876]

My daughter works in retail luxury corporate she saint laurent has never been really high end luxury because pre pandemic they were always on sale at retailers. They got greedy and almost doubled prices that camera bag I got for 800 during pandemic why is it 1690 now 😮

[@eiko-tropicana]

You are my favorite fashion journalist I always learn so much

[@FashionRoadman]

❤️

[@kyledayson4642]

Lmao they’re making their bags at Shein 😂😂😂😂

[@prettynpetty8342]

I think this is proof that luxury is just an idea and it's up to the consumers to decide what is luxurious. Exploiting people in non western countries and making them to work faster, harder and more dangerously to give you a good is not luxurious. Don't let these brands, who invest heavily in their marketing alone, tell you what luxury is. I could care less about the "history of the house" when you're turning off the safety features on a machine so your workers can work faster. At this point, I fully believe in buying vintage, second hand, buying less and buying local (American) contemporary brands with minimal logos.

[@dapperlygrungy3189]

I am not a consumer of designer luxury, but I did buy a few designer sneakers only because they seem higher quality. For example, I like the style of Nike Jordan's, but I don't like the synthetic quality of them. They look cheap. PRADA has their version of Nike Jordan's and they are so nice. It sells for $1070.. I couldn't justify the price until it went on sale for $642. - I bought them. I like wearing dressy sneakers with street wear out at night over gym sneakers. My question is if they are worth buying for the price I paid and the reason why I bought them? I don't care for logos. I don't wear them to show off. I wear them strictly to elevate my my non-designer street wear. I.m a bit self conscious wearing them, because of al the branding on the sneakers, but the style of the PRADA Downtown sneakers I bought are really very nice.

[@divinefeminineblueprint]

Are we really surprised? I’ve seen those canvas bags in Chinatown for years before Dior made it popular. And all these “high-end” dresses being made of polyester 😂 everyone’s being played by these luxury houses. There should be a lawsuit really

[@Seb2900-uq8wq]

How does this even surprise anyone? It’s a fabric bag? It’s like buying polyester pants for 1000€ expecting magic, just because it’s a given brand producing it - if it really cost 100€ including fabrics to make, the production costs are actually quite high relative to say fast fashion brands. From my time in the fashion industry such bags was always used to subsidize the clothing - because we all know that these brands hardly make money on clothing, but mainly on bags and accessories. I don’t know how it is now, but when I was in the industry, a LV leather bag would cost about 250€-300€ to make, and would cost about 2k€ to sell, and retail for about 3,4-3,6k€. Production costs has always been a very little part of total costs. Apart from that, there are still good factories in Italy, and especially in Portugal, and still good stuff to be had from luxury brands. But bags, accessories, etc. are not it.

[@moomin7414]

1:27:04 yess can’t wait for that documentary

[@omjodyomjody2173]

And no one is talking about this.. I searched X ..maybe 2-3 posts 😮

[@eugenefritz6669]

That’s INSANE!!!! Shit

[@jay_caanodii]

The way I dashed, darted, and sprinted to twitter!!!!! Wait miss girl is really bothered by your critique of her when you didn’t even say anything bad. And then her little goons are in the comments co signing!!! 🤡☠️☠️☠️☠️. Those that can’t do critique… girl, he’s worked as a patternmaker and went to csm!!😌

[@dec1225]

Late stage babyyy

[@hellshop1162]

Hating on Kiko chat was tripping! Smh

[@MFLOVEify]

Wow some of the ppl in the live chat are really biased its kinda cringe tbh….like if you think of fashion as an extension of art and art is supposed to be creative, are we suppose to box it in to a certain aesthetic? Or its just got be only things you can wear to work or ppl on the streets can accept. I don’t ever dress for others so I could care less, some of my favorite designers christopher nemeth, jean paul gaultier, dries van noten, vivienne westwood etc. are we going to make fun and call them try hards too…marc jacobs which a lot of ppl seem to love has said too that hes in the business of creating dreams not officewear…I REALLY DO NOT AGREE TO WHAT WAS SAID THAT IS NOT THE ESSENCE OF FASHION

[@annaguobadia4587]

I’m not sure why people are pretending they didn’t know. This is the way of the world. GTFOOH. 🤡🤫🤑🤭🧐🙄🤥🤑😊🤫🤮🧐🙄

[@User9781yt]

👏

[@jclasshawkins5952]

But I’m confused!!! What’s fast fashion? So if it’s sold for more money it still holds its value right? Like yrs and yrs

[@ZephyrinSkies]

Can't tell if this is meant as parody or a genuine question.

[@marchewka2967]

Lol at the Mowalola ☕🫖

[@Boredblacksheep]

Aw, let's not be mean to Boris Johnson, he looks like he is the cousin of the Abercrombie & Fitch dude, Mike Jeffries, but you know, let's not be mean

[@FashionRoadman]

Lol

[@YoogiNation]

Dana Thomas must’ve read the Bible before writing her book. what’s happening in fashion is called signs of the end times (2 timothy 3:1-5)

[@tzegoh333]

They need to lock Bernard Arnault up. He's part of the problem.

[@user-kd5tc7xx5i]

momcoco ’s bags are your partner in young people’s fashion journey

[@damschenlinssen]

kislux I love you so much and watching your videos makes my day brighter