Published by Global Banking & Finance Review®
Posted on October 8, 2025
4 min readLast updated: January 21, 2026
Add as preferred source on GoogleItalian prosecutors are investigating Tod's for alleged labour exploitation in its supply chain, impacting the luxury fashion industry.
By Emilio Parodi
MILAN (Reuters) -Italian prosecutors are seeking to place shoemaker Tod's under judicial administration over alleged worker abuses in its supply chain, in the latest in a string of cases that have tainted the image of Italy's luxury brands.
Tod's would be the sixth high-end brand to undergo such supervision in Italy since the start of last year. Tod's said it complies with the law and constantly checks the working environments it uses.
The news of the investigation into the supply chain, not previously disclosed, came to light from a decision by Italy's Supreme Court, reviewed by Reuters on Wednesday, to set a date for a hearing in a dispute between Milan prosecutors and a local appeals court over the matter.
TOD'S SAYS IT ABIDES BY CURRENT LAWS
In a statement to Reuters, Tod's said it had been informed of the hearing next month but was unaware of any further details.
"We can only reiterate that Tod's complies with current legislation, including labour law, and that constant checks are carried out on the workshops we select and use, which sign agreements, before starting to work with our group, that guarantee the quality of the working environment of their employees and compliance with national labour contracts," it said.
Prosecutors allege Tod's "culpably failed" to adequately oversee its suppliers in order to pursue higher profits. However, the company itself is not under investigation, with attention focused on cleaning up the supply chain.
They went to the highest national court over a decision by the Milan court which, while considering their request for judicial administration to be well founded, had ruled that territorial jurisdiction in the matter lies with the Marche region, in central Italy, which is where Tod's is based.
In order to determine who has jurisdiction to proceed, the Supreme Court has set a hearing for 19 November.
ITALIAN FASHION WORLD HIT BY ABUSE ALLEGATIONS
L Catterton, a private equity firm backed by French luxury group LVMH, took Tod's private last year in agreement with the group's main shareholder, the Della Valle family.
Investigations by Italian magistrates have exposed widespread exploitation of workers in the fashion and luxury supply chain.
High-end Italian cashmere firm Loro Piana and units of fashion brands Valentino, LVMH's second largest brand Dior, Italy's Armani, and Italian handbag company Alviero Martini were previously placed under administration for alleged worker exploitation.
The earliest of these measures, regarding Armani, Dior and Alviero Martini, were already lifted after the companies brought their practices into line with legal requirements.
SUBCONTRACTORS IN THE SPOTLIGHT
According to court documents, the case involving Tod's regards subcontractors at the end of its supply chain, both in the Milan area and in the Marche region.
As with all other cases affecting luxury brands in Italy, this investigation also began with inspections carried out by the Carabinieri police's labour protection unit.
Regarding the Milan area, from 2023 to 2024 Tod's assigned the production of company uniforms for its sales assistants to a company with no production capacity, which subcontracted the work to another Italian company which in turn subcontracted the production to two Chinese-owned factories, then under investigation for worker exploitation.
As for the Marche region, Tod's had directly contracted two Chinese-owned workshops - one of which had subcontracted to another factory - for the production of uppers and other footwear components from January 2024 to January 2025.
In the Marche workshops, inspectors found that workers were paid on a piecework basis, resulting in a net hourly wage ranging from 2.75 euros to just over three euros, well below half of the 10 euros provided for in the national contract.
Workers also had 150 euros deducted from their monthly wages for accommodation and 100 euros for food, according to the court documents.
(Reporting by Emilio ParodiAdditional reporting by Elisa AnzolinEditing by Keith Weir, William Maclean)
Judicial administration is a legal process where a court appoints an administrator to oversee a company's operations, often due to financial difficulties or compliance issues.
Compliance in business refers to the adherence to laws, regulations, guidelines, and specifications relevant to its operations, ensuring ethical conduct and legal accountability.
The fashion industry encompasses the design, production, marketing, and sale of clothing, accessories, and footwear, significantly impacting global economies and cultures.
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