An Italian court on Monday placed Loro Piana, the luxury brand owned by LVMH, under judicial administration for indirectly subcontracting production to Chinese companies accused of exploiting workers.

The Milan court ordered a one-year administration for Loro Piana Spa, according to a 26-page ruling reviewed by Reuters.

The administration could be lifted earlier if Loro Piana brings its practices into compliance with legal requirements.

The court stated that the luxury cashmere company had "culpably failed" in its duty to properly oversee its suppliers in order to achieve higher profits.

Loro Piana could not be immediately reached for comment.

LVMH acquired 80% of Loro Piana in July 2013, leaving 20% in the hands of the Italian founding family.

The Italian luxury sector has been rocked by a series of cases involving abusive labor practices within supply chains.

Loro Piana is the fifth fashion company to be targeted by the same Milan court over similar labor issues since December 2023.

Valentino, an Italian unit of LVMH's Dior, Armani, and Alviero Martini have also come under scrutiny from the court.

Judicial administration remains in place for Valentino as well.

(Reporting by Emilio Parodi, French version by Etienne Breban, edited by Augustin Turpin)