When Luxury Fails Compliance: The Loro Piana Case and What It Means Under CSDDD
Founded in 1924, Loro Piana is an Italian luxury fashion brand globally recognised for its ultra-premium cashmere, vicuña, and refined ready-to-wear collections. Over the decades, it has grown from a textile merchant into a full luxury house offering knitwear, leather goods, footwear, and accessories. Since 2013, Loro Piana has been part of the French luxury conglomerate LVMH.
Loro Piana recently came under juridical administration following allegations that it sourced raw materials from suppliers involved in labour rights violations. Investigations revealed exploitative working conditions in the brand’s supply chain — including workers reportedly labouring up to 90 hours per week for less than $5 an hour.
Under the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), this type of failure would not be limited to reputational damage — it could lead to fines of up to 5% of global turnover.
With public pressure mounting, Loro Piana is facing both legal oversight and a potential long-term impact on consumer perception. The brand, once synonymous with quiet luxury and impeccable sourcing, is now being questioned for its credibility and compliance posture. Consumers are asking if the product is still worth its premium — and that threatens the brand’s pricing power.
The CSDDD requires companies to identify, prevent, and address human rights and environmental risks across their entire value chain — not just direct suppliers.
If Loro Piana’s case had occurred post-CSDDD enforcement, the brand could have faced up to 5% of its global turnover in fines in addition to reputational loss and consumer backlash.
Luxury brands rely not just on product quality, but on the perception of ethics, trust, and exclusivity. When compliance fails, that perception collapses.
Consumers start to doubt whether the price reflects real value and this undermines brand equity, margin strength, and long-term loyalty.
📉 In luxury, non-compliance doesn’t just hurt your image — it weakens the business model itself.
The EU has delayed the full rollout of regulatory frameworks like CSDDD, CSRD, and SFDR.
But this doesn’t mean companies can afford to wait.
Delays are not exemptions, they are time bought.
Now is the window to:
➞ Build real due diligence systems
➞ Prepare compliance workflows that meet evidentiary requirements
Companies that wait for enforcement will lose the race to trust and resilience.
📌 The directive’s delay is not a reason to delay your response. It’s a final chance to get your house in order before regulators, or headlines, come knocking.
Don’t be the next Loro Piana.
If your company isn’t ready for the upcoming wave of EU sustainability laws, you’re not just at risk — you’re already behind.
At Kregtech, we help companies turn complex compliance into clear, auditable systems — before regulators, investors, or customers force your hand.
👉 Talk to us about building a future-proof compliance strategy.
