Prosecutors probe Italy's Tod's, seek six-month ad ban over labour abuse

By Emilio Parodi

MILAN (Reuters) -Italian prosecutors have placed luxury group Tod's and three of its executives under investigation for suspected labour abuses and are seeking a temporary ban on some company advertising, three sources with knowledge of the matter said on Thursday.

This marks the first time an Italian fashion house and its managers have been directly targeted over alleged labour exploitation, and follows a series of cases that have tarnished the reputation of some of the industry's biggest names.

Tod's was not immediately available for comment.

Until now, Milan prosecutors had concentrated on Chinese-owned workshops to which brands outsourced production, placing five high-end fashion firms under temporary judicial administration without opening criminal probes against them.

In an unprecedented move, Milan prosecutors allege Tod's was fully aware of and complicit in labour exploitation at subcontracted workshops, saying third-party audits over several years flagged problems but that these were ignored.

As punitive action, they are seeking a six-month ban on Tod's advertising for luxury goods produced in those factories. It was not immediately clear how much of their merchandise was made in the workshops under review.

The judge has set a hearing for December 3, at which company representatives may be questioned or file written submissions in their defence.

This investigation marks an escalation from an ongoing case announced last month, in which Milan prosecutors had sought judicial administration for Tod's, mirroring measures already applied to the other five fashion labels.

After Reuters broke the news of the case last month, Tod's founder Diego Della Valle defended the company's conduct and warned that the reputation of the "Made-in-Italy" label risked being eroded by the supply chain probes.

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.

(Reporting by Emilio Parodi, editing by Crispian Balmer)