PUCK.NEWS
The Fréd Balloon
As Frédéric Arnault tries to figure out a new story for Loro Piana in a post-‘Succession’ world, Giorgia Meloni’s crackdown on factory working conditions threatens to shed light on what that $3,000 “quiet luxury” cashmere sweater actually costs to make. Is this gig now one of the Herculean labors required to one day win the big job?
Inner Circle Exclusive
Loro Piana, for its part, was growing in a market where very few brands were succeeding, and it seemed as though Frédéric had been set up for success by his predecessor. Photo: Kym Illman/Getty Images
August 7, 2025
Earlier this week, as out-of-office emails were being composed across Europe, about 1,000 of Gucci’s retail and logistics employees declared something of a protest against their employer. The workers, represented by three Italian trade unions, claimed that they had not received the welfare payments promised to them. Will they actually go on strike? (A rep for Kering, the owner of Gucci, didn’t respond to a request for comment on this one.)
Italy’s union membership is relatively high—about a third of all workers—but labor has less bargaining leverage in the country since the employment rate is so low (62.9 percent,
compared to the OECD average of 70.4 percent). And yet, as most of the country’s
actually employed embark on their requisite August holiday, it’s a reminder that Italy remains a hotbed for these sorts of headaches.
Just a few weeks ago, for instance, LVMH-owned Loro Piana had its own labor issues. The entity was placed under court monitoring for the next year due to allegedly substandard worker conditions at one of its subcontractor’s
subcontracted facilities. (That’s right, a subcontractor’s
subcontractor.) This is the fifth investigation into the working conditions at a factory connected to a luxury brand since the Italian government started dredging this stuff up around 2023: Valentino, Armani, and fellow LVMH brand Dior have also passed through court monitoring.
Unsurprisingly, there is a political undercurrent here. MAGA-adjacent far-right prime minister
Giorgia Meloni has introduced her own populist agenda for the country—one that favors workers over conglomerates (to an extent) and endeavors to make Italy, a regional economic player, great again. Meloni “sees a power vacuum Italy can fill as economic leaders in the European Union, and they know this kind of stuff won’t fly and don’t want to be caught sitting on their hands,” as one person who works in the Italian manufacturing system put it. Meloni and her disciples are “really clued into optics” of claims of poor working conditions, as this person put it, and “they’re really trying to get in front of any criticism while still making sure Italian-made brands are the best brands.”
But how bad are the optics, exactly? It doesn’t help luxury brands that the press, even outlets that shy away from covering them critically, feel empowered to report on labor issues—it’s about human rights, after all. Criticizing a company’s business strategy or runway show may be off-limits to more pliant outlets, but dirty factory toilets are fair game. As I wrote when the Loro Piana news first broke, I’m not convinced this will impact overall sales or brand perception, even in the short term, at least not everywhere. This isn’t a Foxconn situation—which, by the way, didn’t really have any lasting drag on any Apple products.
In the West, consumers are generally desensitized to this sort of unpleasant news, especially in America. In other parts of the world, however, consumers exercise a different range of moral judgement. In China, Dolce & Gabbana’s sales were directly affected by their advertising scandal in 2018—and arguably never fully recovered—while women elsewhere continued buying their collectible, incredibly well-fitting dresses. (It certainly didn’t stop
Lauren Sánchez from loving up the brand.) In Korea, the Italian court’s investigation of Dior’s factory dampened sales in an already challenging environment, exposing the fact that the margins on this stuff are wide—meaning, the cost of raw materials and labor isn’t very high, at least compared to the final price. (Perhaps that helps to explain why Dior C.E.O.
Delphine Arnault and creative director
Jonathan Anderson used “quality” as a major talking point upon his debut.)
Anyway, perhaps the most significant downstream impact of this micro-scandal is that it may add a new wrinkle to the Arnault family succession kremlinology. In June, after all,
Frédéric Arnault ascended to C.E.O. of Loro Piana, one of LVMH’s fastest-growing brands, if not
the fastest-growing. At the time, it was an open question whether LVMH C.E.O.
Bernard Arnault, whose shareholders recently gave him the green light to rule the company for another decade, had given his 29-year-old son this plum assignment because it was the
best job, or the
easiest. In other words, was this a light-touch act of favoritism to burnish his credentials? Indeed, his siblings appeared to be toiling away in other, more challenged parts of the empire: Delphine is turning around Dior;
Alexandre is turning around Moët Hennessy; and
Antoine, as head of communications and image (and chairman of Loro Piana) has to deal with
all of it.
Loro Piana, for its part, was growing in a market where very few brands were succeeding, and it seemed as though Frédéric had been set up for success by his predecessor—the incredibly well-regarded (especially for LVMH)
Damien Bertrand, who was shipped over to (actual) behemoth Louis Vuitton, where he is presumably being groomed to someday take over for
Pietro Beccari as C.E.O. But was it also possible that Arnault had
actually entrusted his young son with the responsibility of cleaning up this mess?
The real challenge isn’t so much the bad press around the factories, but rather how luxury consumers respond to new information about what “quiet luxury” actually costs to produce. As one former LVMH executive suggested, “Most customers won’t be sufficiently moved by the labor issues. They most certainly will take offense at paying $3,000 for a cashmere sweater that is known to cost the company only $100. Bottom line: Wealthy folks—especially those who consider themselves discerning enough to spend $3,000 on a sweater—don’t like to feel duped.” Anyway, it’ll be up to Frédéric to pick up the pieces.
The Preppy Lookbook
There isn’t any one person who is obviously at fault here. Sure, there’s a consensus within LVMH that you
could blame Bertrand, but ultimately it was a subcontractor’s
subcontractor—the latest reminder, in case the Arnaults needed it, that their teams have to have eyes on
everything, even issues that are nearly impossible to manage directly at superscale. The solution may be further vertical integration, but a brand like Loro Piana can’t really eradicate the need for subcontractors in Italy. In reality, this is really just the price of doing business for a company of LVMH’s size.
But being duped means different things to different people. Many of those consumers who are buying
Quince blankets for their Hamptons parties will still purchase Loro Piana polos in bulk. And while muted wardrobes might go the way of the pandemic, the clean, preppy look—a way of
being for many—is still very much on trend. Loro Piana is set up to accommodate its look: Preppy codes are interchangeable with many quiet-luxury codes. Its merchandisers simply need to dust off the colors a bit, market the chino program, and remind consumers—via events, advertising, and product mix—than nothing goes better with a pair of deck shoes than an Italian cashmere sweater.
In the coming months, Frédéric will need a new story for the brand, not just new policies, to shape what Loro Piana represents in a post-
Succession world. Perhaps he’ll hire some name-brand designers for the individual categories, similar to Hermès. Or maybe he’ll launch a new campaign—full-fledged or whisper—underscoring the quality of the brand’s goods.
He also may eventually want a new story to tell about himself, too. As Arnault’s second-youngest son, and the only one in the family with a prized degree from École Polytechnique, his father’s alma mater, Frédéric might be able to leverage a successful clean-up as the latest evidence that
he is the heir apparent after all—especially as his father’s latest retirement moratoriums seem to dim his older step-siblings’ chances.
The good news is, Loro Piana is performing so well that B.A. directed Bertrand to
control growth, hence the limited availability of its best-selling style, the Summer Walk loafer. So he always has that to fall back on. Everyone loves a revival. At least in theory.
