Prada ‘zero tolerance’ supply chain probe results in axing of 200 suppliers

Core Insights - The Milan-based company has conducted over 850 inspections of its Italian suppliers and subcontractors since 2020, resulting in more than a quarter of these inspections leading to terminations [1][4] - The audits revealed serious labor law violations, including dormitories within factories, but more common issues were inadequate health and safety measures and waste handling problems [2] - The luxury fashion industry in Italy is facing scrutiny due to investigations into labor abuses, with notable cases involving other brands like Tod's and LVMH [3][4] Company Actions - Prada has approximately 1000 suppliers and subcontractors and has implemented a "zero tolerance" approach to compliance, which has led to a decrease in termination rates over time [2][5] - In the previous year, Prada conducted 188 inspections, resulting in 43 dismissals, indicating a proactive stance on supply chain management [4][5] - The company’s initial audits in 2020 had a much higher termination rate, with over half of the 143 inspections resulting in contract terminations [5] Industry Context - The Italian luxury fashion sector is under investigation for labor exploitation, prompting discussions about potential certification schemes for compliance [3][4] - The Milan Public Prosecutor's Office has been active in addressing labor issues, as seen in the case of Tod's and the scrutiny faced by LVMH's Loro Piana brand [3][4]