Are your Prada, Vuitton bags made in China?

Chanel reportedly relies on immigrants' sweat shops, mum on confirmation calls

By Kwaak Je-yup

Shoppers are often tricked into thinking a luxury item they purchase is unique, made from a seasoned French or Italian artisan painstakingly hand-stitching in a countryside atelier, from start to finish.

Most luxury goods are now anything but products of that expensive process as companies seek the most economical way possible to produce your it bag.

In May last year, the French luxury brand Louis Vuitton (LV) was dealt an unusual blow. The U.K. Advertising Standards Agency (ASA) banned the label's ads portraying seamstresses working with a needle and thread. Even after LV provided evidence about its hand-made production, the ASA ruled it insufficient ― and misleading ― to imply handcraft.

Luxury fashion houses have managed to convince customers to pay up for prestige, design and quality: what the European brands and their illustrious heritage represent. But how much longer they can sustain this dodgy art of branding is in question, as they increase volume and shift to cheaper production facilities.

While the houses or the brand's own manufacturing bases continue to employ local workers, little production is done by a group of European artisans. Now low-paid migrant workers in local garment factories make the articles of clothing prized by the fashion-conscious.

Country of origin, the "Made in" label, was once considered a guarantee of quality. It is still marked, albeit discreetly, but is rendered irrelevant because semi-finished goods are shipped to Europe to go under last-stage finishes ― and be marked as made in the continent.

Online bulletin boards for luxury goods enthusiasts are awash with perplexed and/or angry customersquestions about whether they mistook a fake bag for the real thing. One recurrent complaint is a sudden discovery of the phrase "Made in Spain" or "Made in the United States" marked below "Louis Vuitton Paris." Aficionados do not want anything else than "Made in France."

Imagine what they would say to bags manufactured in China, assembled alongside less prestigious labels in the same factory. Paul French, Shanghai-based consumer market consultant, claims he has witnessed first-hand luxury products of different brands manufactured, side-by-side, in factories in Guangdong Province, southern China.

"LV, Burberry, Coach...all of them. You name it," he said in an e-mail interview.

A Louis Vuitton spokesperson in Seoul categorically rejected the claims, saying in a phone interview the company "only has workshops in France along with Catalonia, Spain and California, with direct quality control over them." Later, she added Belgium, Italy and Switzerland to the list, quoting official data from the Paris headquarters.

Prada has been more transparent about its delocalized production, especially with its initial public offering in Hong Kong last month. According to the company prospectus, Prada "outsource(s) most of the manufacturing of our semi-finished and finished products to external manufacturers thus granting flexibility to our production process." More specifically, for the financial year ending Jan. 31, about 20 percent of the finished goods were from 11 directly-controlled factories and the remaining 80 from 480 external manufacturers worldwide.

While the Italian house, just as any other, leverages the national heritage of craftsmanship for high margins ― stressing 390 of the contractors are located in the country ― the reality that these facilities exist is grim.

In December 2007, the Italian national broadcaster Rai3 aired a controversial and incriminating documentary called "schiavi del lusso," or slaves of luxury. It showed Prada's Milan flagship store on the iconic via Montenapoleone strip charging 440 euro (660,000 won) for a bag that cost only 26 euros to make _ in Naples, southern Italy. Bottega Veneta's symbolic interwoven bag priced at 3,500 euro (5.3 million won) actually cost 20 euros, also made in the countryside.

How? A part of the answer was found in another factory where bags from labels like Chanel and Marc Jacobs, among several others, were produced alongside each other by Chinese immigrants. They were living in horrid conditions, working longer hours, with shorter breaks and for lower wages than their Italian counterparts, accompanied by appalling living standards, with no windows or bathrooms.

All these products are sold with the label, "Made in Italy," but most consumers are unaware of whose hands the items have gone through.

Legal and even illegal immigrants have penetrated so deep into the Italian garment industry that the workforce has extended beyond the infamous Tuscan city of Prato, known for Chinese-dominated manufacturing, to the neighboring regions of Le Marche and Veneto.

LV's Seoul spokesperson, when asked about the identity of workers in the brand's workshops, could not confirm the nationalities.

"In the videos I have seen, (the workers) were local citizens trained locally," she said. "But there may be a few Chinese people."

A spokesperson for Prada's headquarter in Milan could not comment, citing a blackout period, during which access is limited. Chanel's representative in Seoul could not confirm the information about their factories. The Gucci Group could not be reached.

The Korean press has recently hit luxury houses for not reducing prices after the EU-Korea Free Trade Agreement (FTA) eliminated tariffs, valued from eight to 15 percent. Louis Vuitton, Chanel and Gucci among others actually increased their retail prices, but pressure has been mounting after Hermes responded, lowering the price modestly. Chanel followed suit later.

"The recent price reduction after the FTA reflects the European origin of our products," said Chanel spokesperson, implying that other brands unable to lower the price have something to hide.

Hermes, at the priciest end of luxury goods, is an industry exception for employing hand-made techniques from start to finish in France and even shows the process via its YouTube channel.

Handbags must be manufactured in the member states of the European Union in order to qualify for tariff-free access to Korea, according to the text of the agreement.

Insiders working at major brands defend that delocalized production is not a matter of choice for some products. One Italian source claimed there are, for instance, no high-quality sports shoe manufacturers left in Italy.

But underlying the consumers' concern is the lack of transparency; there is no easy way of knowing how each brand is evolving and how each product was manufactured. While the fashion houses are adamant that their brands are the ultimate proof of quality, semi-finished products moving to the traditional European nations to be stamped "Made in France"or "Made in Italy" show that they, too, recognize the trademark's value for customers, justifying their mark-ups.

Until then, shoppers are be advised to do more research about exactly what they are purchasing, a hollow glossy image of tradition or a true piece of artisanship.