What: Dior establishes an in-house industrial division and appoints Giorgio Striano as chief industrial officer following scrutiny over subcontractor labor practices in Italy.

Why it is important: This strategic restructuring demonstrates how luxury brands are responding to regulatory scrutiny by bringing critical manufacturing oversight in-house, potentially setting a new standard for the industry.

French luxury house Dior has established an in-house industrial department in response to recent scrutiny over its subcontracting practices. This strategic move follows allegations of worker exploitation at Italian subcontractors earlier this year, which prompted investigations by competition authorities into firms associated with both Dior and Armani groups. To lead this newly formed division, the company has appointed Giorgio Striano as chief industrial officer, effective January 2025. Striano, who will be based in Milan and report directly to CEO Delphine Arnault, brings extensive global industrial operations experience from roles at Procter & Gamble, Manuli Rubber, and EssilorLuxottica. The appointment underscores Dior's commitment to manufacturing excellence, with Arnault emphasising the importance of sustainable production processes that comply with ethical regulations while preserving the brand's creativity and craftsmanship. This restructuring represents a significant step in Dior's efforts to enhance control over its production processes and ensure ethical manufacturing practices.

IADS Notes: Dior's establishment of an in-house industrial division reflects broader industry trends observed throughout 2024. As noted in January 2024, new EU and US legislation has intensified scrutiny of luxury brands' supply chains, demanding greater transparency and improved labor practices. This move appears particularly timely given the challenging market conditions reported in October 2024, when LVMH faced a 5% decline in fashion and leather goods sales. The appointment of Giorgio Striano aligns with the industry-wide shift towards enhanced supply chain resilience and ethical manufacturing practices, as highlighted in November 2024 research showing luxury brands actively restructuring their production strategies. This development suggests Dior is proactively addressing both regulatory pressures and operational challenges while positioning itself for sustainable growth in an increasingly scrutinized luxury market.

Dior builds industrial division following scrutiny over labour practices