Prada Cuts 200 Suppliers Over Compliance Violations

Prada has reportedly dismissed 200 suppliers due to compliance violations over the past five years while conducting a rigorous “zero tolerance” audit in response to allegations of labor abuse within the fashion supply chain.

As reported by the Financial Times, the Milan-based luxury brand has performed over 850 on-site inspections of its Italian suppliers and subcontractors since 2020. This includes extensive surveillance, with all-night stake-outs conducted outside subcontractor factories. Alarmingly, more than a quarter of these inspections led to the termination of supply contracts.

The audit uncovered significant labor law violations, including the troubling discovery of dormitories situated within factories where workers were expected to sleep. However, these instances were less frequent compared to other types of non-compliance, such as insufficient health and safety protocols and poor waste handling practices.

Currently, Prada works with approximately 1,000 suppliers and registered subcontractors. The luxury fashion industry in Italy has faced heightened scrutiny due to a wide-ranging and contentious investigation by Milan prosecutors into alleged labor abuses within domestic supply chains.

Last October, the Milan Public Prosecutor’s Office reportedly moved to place the shoemaker Tod’s under judicial administration due to claims of worker exploitation in its factories located in China. This action followed reports that Italy’s industry minister was considering the introduction of a certification system after LVMH’s Loro Piana brand was placed under court administration for similar allegations.

Although Prada is not currently under investigation, Milanese prosecutors requested information regarding the company’s supply chain in December.

The luxury brand informed the Financial Times that it conducted 188 supplier inspections in the previous year, resulting in 43 dismissals.

Since initiating these audits in 2020, the rate of supplier terminations has decreased. Initially, in 2020, there were 143 inspections, with over half resulting in contract cancellations. Prada attributes the slowdown in terminations to its adoption of a zero tolerance approach.