Italy’s luxury fashion industry is once again under scrutiny as prosecutors seek to place Tod’s, the renowned shoemaker, under judicial supervision over alleged labour abuses within its supply chain. The move marks the latest in a series of high-profile investigations targeting worker exploitation across the “Made in Italy” fashion ecosystem. While Tod’s insists it complies fully with national labour laws and conducts regular supplier audits, prosecutors argue that the brand “culpably failed” to oversee subcontractors, a lapse they claim may have enabled worker mistreatment in pursuit of profit margins. The case underscores a growing tension between Italy’s reputation for craftsmanship and the realities of globalized production.

Legal Dispute Over Jurisdiction and Oversight

The controversy surfaced after Italy’s Supreme Court set a November 19 hearing to resolve a jurisdictional dispute between Milan prosecutors and a local appeals court over whether oversight authority lies in Milan or the Marche region, where Tod’s is headquartered. The prosecutors maintain that judicial administration is necessary to ensure proper supply chain reforms, while Tod’s asserts that it has not been accused of direct wrongdoing and remains committed to ethical business conduct. In a statement to Reuters, Tod’s said it was “unaware of further details” of the upcoming hearing but reiterated its compliance with national and EU labour regulations. The company emphasized that all workshops in its network must sign contracts guaranteeing safe working conditions and fair employment terms. Nevertheless, the request for judicial administration reflects Italian authorities’ increasing willingness to intervene directly in corporate governance to enforce accountability in the luxury sector.

Fashion’s Hidden Crisis: Exploitation in the Supply Chain

The case against Tod’s is part of a broader crackdown that has already ensnared several major fashion houses, including Valentino, Dior, Armani, Loro Piana, and Alviero Martini. Many of these brands have since exited judicial administration after implementing reforms, but the recurring allegations highlight persistent vulnerabilities in the subcontracting networks that power Italy’s high-end manufacturing sector. Italian investigators have uncovered instances of underpaid migrant labour, illegal subcontracting, and unsafe conditions in small workshops supplying luxury labels. Such practices, often concealed behind layers of intermediaries, have threatened the credibility of “Made in Italy”, a label long synonymous with quality and integrity. By pursuing cases like Tod’s, prosecutors aim to send a clear message: ethical negligence, even if indirect, carries reputational and legal consequences.

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Government Pushes for Supply Chain Certification

In response to the latest scandal, Italy’s Industry Minister Adolfo Urso announced a legislative proposal to create a legal certification system for fashion companies, designed to safeguard the integrity of the national luxury supply chain. The scheme would enable brands to obtain third-party verification of compliance with labour laws and contractual standards, effectively serving as a pre-emptive audit mechanism.

“With this measure, it will be possible to secure Italy’s fashion supply chain, a source of pride for ‘Made in Italy’ and protect its reputation worldwide,” Urso stated.

The initiative reflects growing governmental concern over the reputational and economic damage caused by repeated labour violations in Italy’s €80 billion fashion export market. If enacted, the certification framework could set a precedent for similar accountability systems across the European luxury sector.

Corporate Responsibility and the Future of Ethical Luxury

Although Tod’s is not under direct criminal investigation, prosecutors’ request for judicial supervision places pressure on the brand to strengthen supply chain transparency. The move also poses a reputational challenge for L Catterton, the private equity firm backed by LVMH, which took Tod’s private in 2024 in partnership with the Della Valle family. Investors and regulators alike are now watching how the company will respond to ensure full compliance and avoid prolonged court oversight. For Italy’s fashion sector, the case is emblematic of a larger reckoning. Global consumers increasingly expect luxury brands to demonstrate ethical production and human rights due diligence, not merely aesthetic excellence. The outcome of the Tod’s hearing could therefore influence how other fashion houses approach supplier audits, subcontractor management, and social sustainability standards in the years ahead.

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A Test for “Made in Italy” Integrity

As Italy balances its cultural heritage with modern expectations of corporate ethics, the Tod’s case represents a critical inflection point. If judicial supervision proceeds, it will mark the sixth such intervention in less than two years evidence of systemic challenges that demand structural reform rather than piecemeal compliance. At stake is more than one company’s reputation. The outcome could redefine how Italy’s luxury industry enforces accountability across complex, fragmented supply chains. Whether through legal certification, investor pressure, or consumer demand, the message is clear: in the new era of responsible fashion, luxury must be built on transparency as much as on tradition.

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