Tod's founder warns that “Made in Italy” reputation is at risk due to supply chain investigations

Diego Della Valle, founder and chairman of Italian luxury group Tod's, said on Friday that investigations into Italy's fashion supply chain risk damaging the country's global reputation for premium brands and quality products. Italian prosecutors are seeking to place the shoemaker under receivership over alleged labor abuses among its suppliers.

“'Made in Italy' represents one of the areas of excellence of our country and… if someone questions it (even slightly), this causes enormous damage,” Della Valle said at a news conference in Milan. “Made in Italy” is the term used in the country as shorthand for Italian exports and quality products.

The businessman called for laws that provide “Italian regulatory bodies with all the necessary tools to carry out exhaustive controls, and at the same time allow us (brands) to work without being judged on the basis of often completely unfounded accusations.”

Prosecutors allege that Tod's “culpably failed” to adequately supervise its suppliers, including two directly hired, to achieve greater profits. The company, which is not under investigation, said it complies with the law.

Five other luxury brands have already been placed under receivership on similar grounds in Italy since the beginning of last year. Della Valle stressed that the investigations refer to a small number of cases compared to the numerous companies that respect the rules.

Brands operating in Italy often use suppliers who, in turn, subcontract the work to other companies. Monitoring the entire supply chain “is not possible,” Della Valle said.