Nobel Prize-winning economist Muhammad Yunus has been appointed the head of Bangladesh’s interim government, a key step toward restoring order after weeks of protests drove former Prime Minister Sheikh Hasina from the country.

The widely expected decision to tap the high-profile development banker was announced by President Mohammed Shahabuddin’s office, who had earlier met with the country’s armed forces and protest leaders, who called for Yunus to take the role.

“The country is now going through a transitional period. It is important to form an interim government as soon as possible to overcome this crisis,” Shahabuddin said.

Yunus will return to Bangladesh “soon,” protest leader Nahid Islam said in a televised briefing in the capital Dhaka on Tuesday night, adding members of the interim government have yet to be finalised.

What started out in late June as peaceful protests seeking to abolish a government jobs quota turned into deadly unrest in recent weeks with demonstrators seeking to oust Hasina, who had show little sign of backing down. Her sudden resignation follows a weekend of student-led clashes with pro-government supporters that pushed the death toll from the violence since mid-July to about 350 people, according to news reports and data from local hospitals and police stations.

Yunus’ top task will be to restore calm after Hasina, who turned Bangladesh into an economic success and ruled with an iron fist, fled Monday to India and her official residence was ransacked. Shahabuddin, backed by the country’s powerful military, has vowed to hold elections “as soon as possible.”

Yunus, 84, who pioneered micro-loans as a tool to fight poverty, had faced legal trouble under Hasina that he has called politically motivated.

Hasina was the world’s longest serving female head of a government, winning a fourth term as prime minister in an election in January that was boycotted by her opponents and voters. The US, the biggest buyer of Bangladesh’s exports, had criticised the polls, and imposed visa curbs on members of Hasina’s party and law enforcement officials in September.

While Hasina’s Awami League party dominated parliament, the army chief invited none of its members to talks on forming an interim government. On Monday, thousands of jailed protesters were freed, as well as Hasina’s rival and opposition leader Khaleda Zia — a former prime minister herself.

By Arun Devnath

Learn more:

What the Crisis in Bangladesh Means for Fashion’s Supply Chain

The country’s prime minister resigned and fled the country on Monday after weeks of protests roiled the world’s second-largest garment exporter.

Swedish retailer H&M AB told its suppliers in Bangladesh that it won’t seek discounts due to delays that might occur after factories were shut down by deadly protests.

Plants in Bangladesh remained closed on Tuesday afternoon, despite the lifting of a curfew in the country, according to an email from an H&M spokesperson. The company will continue to monitor the situation on a daily basis, the spokesperson said.

Earlier in the day, Bangladesh President Mohammed Shahabuddin directed authorities to lift the curfew following more than two weeks of clashes between supporters of ousted leader Sheikh Hasina, security forces and student-led protesters. The president also dissolved the national parliament, paving way for the formation of a military-backed interim government and new elections.

China and Bangladesh are the fast fashion retailer’s largest production markets, according to the company. The shares fell 0.9 percent as of 16:30 in Stockholm.

By Rafaela Lindeberg

Learn more:

What the Crisis in Bangladesh Means for Fashion’s Supply Chain

The country’s prime minister resigned and fled the country on Monday after weeks of protests roiled the world’s second-largest garment exporter.

🇯🇵 Global cosplay industry gathers in Japan for summit. The global cosplay community gathered at the World Cosplay Summit in Nagoya, Japan from August 2-4. The value of the global cosplay costumes, clothing and wigs sector in 2022 was $35.2 billion, according to a Research & Markets report. At last week’s event celebrating the subculture, a ‘championship’ competition saw teams from 36 countries take to the stage, dressed as their favourite anime, cartoon, manga and video game characters. In addition to a red carpet and runway, there were exhibition booths from wig brands and performances near cosplay clothing retailers along the city’s Osu Shopping Street. [Japan Times, Japan Today, Yahoo Finance]

🇮🇳 Designers partner with big jewellers at India Couture Week. The annual event, which is organised by the Fashion Design Council of India (FDCI) and supported by Hyundai as the title sponsor and Reliance Brands as partner, took place in New Delhi from July 24-31. Featuring more than a dozen shows of mostly made-to-measure luxury formal wear, traditional evening wear and wedding wear, the event saw designers such as Rahul Mishra, Tarun Tahiliani, Gaurav Gupta and Falguni Shane Peacock partner with fine jewellers Mora, Shree Jee and Hazoorilal, Anmol and Tanishq, respectively, for their runway looks. [BoF Inbox]

🇯🇵 Department store shares hit by Tokyo stock market volatility. Japanese department store chain Isetan Mitsukoshi, which has seen foreign tourists clambering to buy luxury goods at favourable exchange rates, saw its shares fall by more than 10 percent last Thursday following an interest rate rise and a surge in the yen against the dollar, with equities in non-fashion companies like Toyota, Panasonic and Mitsui Fudosan also declining. On Monday, after a disappointing US job report scared investors, the Nikkei 225 fell by more than 12 percent, in what was the worst day of trading for Japanese stocks since 1987. But by Tuesday, the index had rebounded, soaring by more than 10 percent, and Isetan shares had recovered. [Financial Times, BBC, Business Insider]

🇨🇳 Richard Liu is ‘still running’ Chinese e-tailer JD.com from abroad. Despite officially stepping down as CEO two years ago, the company founder and chairman has been leading it from overseas, mostly in London though he also spends time in Dubai, Tokyo and Hong Kong, according to several people familiar with the matter. The billionaire quit in 2022 amid Beijing’s efforts to rein in big tech leaders, a campaign that took place four years after Liu was arrested in the US on allegations of sexual assault, which he denied and which did not result in any charges being brought against him by prosecutors. [Financial Times]

🇦🇺 Australia’s Country Road Group sees annual sales fall 6.8%. The Melbourne-based fashion retail group, which holds brands Mimco, Politix, Trenery, Witchery and its namesake label, saw sales decline in the year ended June 2024, according to a trading update by its South African parent company Woolworths Holdings Limited (WHL). Cape Town-based WHL, which also owns the Woolworths fashion and food retail chain across Africa, said it also expects a decline of up to 32 percent in total headline earnings for the period. [CNBC]

🇨🇳 China’s share of supply to Nike and Adidas fell 20-25% over 5 years. Although the country still led the world in textile and clothing exports in 2022 it lost ground to other Asian countries and its share of overall supply to the two western sportswear brands fell from 20-27 percent in 2017 to 16-20 percent in 2022, according to a Bank of America Global Research report. China’s share of global footwear exports has fallen by more than 10 percent over the past decade, according to figures from the 2023 World Footwear Yearbook. [Financial Times]

🇵🇦 Panama Canal capacity is almost back to normal following drought. The number of vessels able to use the crucial trade artery, which accounts for about 5 percent of shipping connecting the Atlantic and Pacific Oceans, will increase over the coming months thanks to the early arrival of rain. “Now (the waterway) is practically back to normal,” said deputy administrator Ilya Espino, following a year of capacity reductions that delayed and disrupted global supply chains. [Reuters]

🇨🇳 Temu faces backlash from suppliers as it pivots to warehouse model. The PDD Holdings-owned online marketplace has started to hire suppliers with overseas warehouses in the US and Europe, in a move toward a “semi-managed” model whereby Chinese merchants take on shipping, warehousing and last-mile delivery costs that were previously covered by Temu in a “fully managed” model. The move would help protect the company if governments close a de minimis tax loophole and reduce delivery times. [Financial Times]

🌏 Canada Goose boosts sales on Asia strength, lightweight apparel. The Toronto-based outerwear company booked revenue of 88.1 million Canadian dollars (US$63.7 million) for the fiscal first quarter ended June 30, as Asia revenues increased 25 percent, bucking the slowdown in the Chinese luxury sector. The Asia region is home to over 40 percent of its stores. [BoF]

🇨🇳 London Stock Exchange denies lowering standards to win Shein IPO. Exchange CEO David Schwimmer has affirmed its commitment to governance and denied lowering standards in order to lure the China-founded, Singapore-headquartered fast-fashion retailer’s £50 billion ($63 billion) IPO to London, despite campaigners’ concerns about a lack of transparency regarding its supply chain and allegations its suppliers have used forced labour in China’s Xinjiang region. [BoF]

🇮🇳 India’s Moxie Beauty raises around $2 million in seed funding round. The Guruguram-based DTC haircare brand has secured 17.3 crore rupees in a funding round led by Fireside Ventures with participation from angel investors from the beauty, wellness and personal care industries including Samir Singh, Arjun Purkayastha, Suhasini Sampath, Navin Parwal and Sangeet Agrawal. Founders Nikita Khanna and Anmol Ahlawat launched the startup in 2023. [Economic Times]

🇨🇳 L’Oréal refines its strategy as China demand drags, US falters. The French group’s CEO Nicolas Hieronimus and CFO Christophe Babule said the company’s broad brand assortment will carry it through the downturn. It’s recent Q2 results showed the North Asia division, which is 60 percent mainland China, declined 2.5 percent, while North America grew 3.4 percent. [BoF]

🇮🇳 Indian fashion retailer Arvind sees profit plummet 40% in Q1. The Bengaluru-based firm, which has a portfolio of owned and licensed international brands including Calvin Klein and Tommy Hilfiger and a denim fabric manufacturing business, said consolidated net profit fell to 393.1 million rupees ($4.7 million), down from 658.7 million in the corresponding period a year earlier. [Economic Times]

🇨🇳 Average luxury spend by Chinese in Italy is up on pre-pandemic levels. Chinese travellers who went specifically to Italy to shop for luxury goods spent €2,669 ($2,920) in Q2 2024 compared to €1,883 in Q2 2019, an increase of 42 percent. Spending for premium brand products rose 15 percent, according to data provided by Global Blue and Retex. [DFNI]

🇮🇳 India’s Titan reports 5.4% decline in quarterly profit. The country’s largest watch and jewellery group, whose portfolio includes its namesake brand alongside Tanishq, Zoya, Mia and CaratLane, said consolidated net profit reached 715 crore rupees ($85 million) for the quarter ended June 2024, down from 756 crore rupees in the corresponding period a year earlier. [Economic Times]

🇹🇷 Turkey blocks Instagram over censoring posts about Hamas leader. Explaining the reason for the country’s blocking of the platform, a government spokesman accused the US-based social media giant of “preventing people from posting messages of condolences for the passing of Hamas leader (Ismael) Haniyeh.” Turkish president Erdogan has become more vocal in his support of the militant group in the ongoing Israel-Hamas war, condemning the killing of Haniyeh in Tehran, which Iran has blamed on Israel. [Financial Times]

🇪🇬 Egypt devises plan to accelerate modernisation of its cotton industry. Government ministers recently met to discuss how to speed up the modernisation of the country’s spinning and weaving industry by introducing advanced technologies, upgrading equipment and improving both productivity and product quality in a bid to expand production capacity and boost finished products exports. [Fibre2Fashion]

🇮🇳 Myntra CEO Nandita Sinha to take over as Flipkart’s head of fashion. The leader of Indian fashion e-commerce giant Myntra, whose parent Flipkart Group was acquired by Walmart in 2018, will replace Arief Mohamad who is readying to exit e-tailer Flipkart, which sells everything from groceries and electronics to fashion and furniture. The two businesses will continue to operate separately under Sinha, who led Myntra to EBITA level profitability earlier this year. [Economic Times]

🇧🇷 Brazilian fashion group Azzas 2154 confirms its management team. The company, a new entity formed from the recent merger of Brazilian footwear and fashion companies Arezzo & Co and Grupo Soma that recently listed on the São Paulo-based B3 stock exchange, has appointed Alexandre Birman as CEO and COO, Roberto Jatahy as women’s clothing business unit officer and Rafael Sachete da Silva, as CFO and investor relations officer. [BoF Inbox]

🇨🇳 Shiseido Company appoints Kentaro Fujiwara as CEO. The Japanese beauty conglomerate has promoted Fujiwara, its current COO, to lead the firm, effective Jan. 1, 2025. The group, which owns international brands such as Drunk Elephant and Nars as well as its namesake line and holds a number of fragrances licences, said incumbent CEO Masahiko Uotani will retire at the end of this year but remain an advisor to the company. [BoF]

🇿🇼 UK jeweller sources fully traceable aquamarine stones from Zimbabwe. Monica Vinader has partnered with Zimbaqua, the first gemstone mine in Africa known to be exclusively managed and mined by women. Until now the company’s ‘Mine to Market’ traceability initiative has been limited to laboratory-grown diamonds and precious metals. [Retail Jeweller]

🇨🇳 Guerlain taps actress Karen Mok as brand ambassador. The LVMH-owned beauty company has partnered with the Hong Kong actress and singer to be its new makeup ambassador, creating exclusive makeup looks for her concerts. Mok is a veteran of the entertainment industry with a career spanning three decades. [Jing Daily]

From Christian Dior to Fenty Beauty, fashion and beauty brands from across the globe have gained exposure from the Paris Olympic Games. The marketing value of these varied activations has yet to be tallied but one of the biggest winners in China might end up being Maogeping, a cosmetic brand enlisted by the country to be its official team provider. Helmed by its namesake founder and make-up artist Mao Geping, the brand is on site to ensure the country’s 400-plus athletes present their best selves — both on and off camera.

The partnership has spawned its own hashtag, #TheGloryofChinainParis in Chinese, clocking up millions of views across social media platforms Weibo, Xiaohongshu and Douyin. A more lasting reminder of the brand’s intimate connection with China’s top athletes — a new class of celebrity in the country that’s increasingly popular among fashion and beauty brands seeking endorsements beyond entertainers — is Maogeping’s Olympic-themed makeup range.

So far, China’s fashion industry has focused on coverage of sporting heroes like Zheng Qinwen, a tennis champion who looked immaculate blasting her opponents on the court in Paris, and off-duty images of Wu Yanni, a hurdler who makes headlines as much for her tattoo and makeup routines as for her speed on the track.

The Maogeping deal is one of many that Chinese companies have struck in a bid to associate themselves with the apex event in sporting excellence.

Alibaba Group, which owns e-commerce platform Tmall and other companies that are key fashion retail channels, has become an official Olympic sponsor. Rival JD.com launched a campaign offering customers a selection of champion-worn gear. Local sportswear conglomerate Anta sponsored the Chinese Olympics Committee and its competitor Li Ning created a high-tech suit for the table tennis team. Expanding its marketing footprint beyond China is Fujian-based sporting goods company Peak which provided clothing for several international Olympic teams including the Philippines and Belgium.

Companies like cosmetics brand Chando have been long-term partners of Chinese sporting teams, in its case diving. Other fashion and beauty brands have chosen to hire individual athletes as ambassadors or for other product endorsements.

“This reduces the risk in the investment compared to say a C-pop star [since the local music industry is one] that’s more scandal-prone,” said Allison Malmsten, strategy consultant at Shanghai-based marketing agency Daxue Consulting, noting that athletes are generally considered strong role models in the China market, standing for good sportsmanship, discipline and hard work.

Luxury’s bet on Chinese Olympians

Long before anyone could have imagined an LVMH-sponsored Olympics, the idea of Chinese athletes representing global luxury brands was unheard of. However, the legacy of the 2008 Beijing Summer Olympics marked their “coming of age,” said sports industry expert Li Sheng in a recent documentary about the games. “Many athletes became household names” after “a media awakening turned many into stars,” he added, which led to brands discovering their potential as celebrity marketing vehicles.

Fast forward to the 2022 Beijing Winter Olympics and a few athletes rose to superstar status such as freestyle skier Eileen Gu, who has links with Louis Vuitton and IWC Schaffhausen and snowboarder Su Yiming, whose social media feed has recently been filled with references to Cartier, Louis Vuitton and Adidas.

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Then came the run-up to this year’s Paris games. Dior China reportedly announced that sprint freestyle swimmer Zhang Yufei would represent the brand; Jaeger-LeCoultre and Boss linked hands with champion medley swimmer Wang Shun; and watchmaker Tag Heuer tied up with 200-metre breaststroke world record holder Qin Haiyang. Qin was also tapped by Louis Vuitton, alongside basketball player Yang Liwei, to be a ‘friend of the house.’

For some brands, however, recent Olympic games have shown that athlete partners are not without risks, whatever their nationality. In the case of China, its swimming team has been embroiled in doping allegations.

But overall, the perception of these stars as healthy, dedicated and morally upright role models “aligns well with the values of luxury brands [in the China market],” said Olivia Plotnick, founder of media agency Wai Social. It helps that athlete-brand partnerships also align with what the Chinese government wishes to promote on a national level: a prioritisation of health and fitness and ambitious goals for China’s sports economy.

“Investing in sports, therefore, is an excellent move, especially for luxury brands urgently looking for new growth drivers that match their brand personality,” said Mintel’s senior analyst Blaire Zhang, referring to brands that are increasingly worried by the slowdown in the China luxury market.

Prada was an early adopter of the trend, first dressing Chinese athletes in 2022. The following year it sponsored the women’s football team in a partnership that included the Asian Games and the Olympics. Table tennis captain Ma Long acts as an ambassador for the Italian luxury house and for watchmaker Omega.

Meanwhile, Louis Vuitton, Swatch, Audemars Piguet and Loewe are all picking up momentum on Chinese social media due to athlete affiliations. For its campaign celebrating China’s 520 romantic holiday, Bottega Veneta featured Xu Xin, a champion table tennis player who missed this year’s games, golfer Ning Zetao and multiple gold medal-winning diver Guo Jingjing, who is now a judge at the Paris games.

Kantar’s Vesper Wang explains the appeal of such marketing activations. “These go beyond immediate sales revenue, including the enhancement of brand equity and the strengthening of market position,” said the associate manager of the insights division at the market data provider’s Greater China office. Although initial investment may be high, Wang says, the potential returns in brand loyalty, market penetration and financial performance can be “considerable.”

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Quick gains can also be made from product placement during high-profile moments, unboxing or ‘warming up’ videos. After Hong Kong fencing champion Cheung Ka-Long won gold wearing a recognisable bracelet, Malmsten said searches for jeweller Van Cleef & Arpels spiked on Google Trends data in Hong Kong, which competes at the Olympics with its own team. Cheung has been on the luxury industry’s radar for some time, having featured on the cover of Vogue Hong Kong last year.

“Brands can easily livestream particularly [popular] products [in China] for a quick sales boost,” Plotnick remarked. During the Beijing winter games, a Tiffany bracelet worn by Eileen Gu went viral and reportedly sold out.

Sportswear brands seek winning formula

Among the many local brands gaining traction at the Olympics, there’s one clear commercial winner, said Paris-based Chinese fashion journalist Liu Ziyi.

Since 2019, Anta has been the official sportswear supplier of the International Olympic Committee, signing up to provide clothing, shoes, and accessories for IOC members and staff until 2027. It designed the Chinese team’s official outfits for Paris, the sleek carbon-neutral uniforms emblazoned with dragon motifs. With revenues last year of 62.3 billion yuan ($8.6 billion) parent company Anta Sports has deep pockets for such sponsorships.

The company’s activations include a new youth-focused Olympic cultural project and Anta Ling Loong, a sub-brand which launched a pop-up store open in upmarket department store SKP in Chengdu. Anta brand ambassador Eileen Gu was reportedly spotted in a Ling Loong T-shirt, at China House, which opened ahead of the games in Paris.

“Even though Gu isn’t taking part in Paris, her appearance [at China House] is a clever use of one of China’s most popular sports athletes among young Chinese fans which is bound to reflect well on Anta,” said Antoaneta Becker, director of consumer economy at the China-Britain Business Council, noting that Gu is reported to have earned around 200 million yuan ($27 million) in endorsement deals in 2021 alone.

In terms of visibility, Plotnick points out that Anta has “overtaken” Li Ning — the sportswear brand founded in 1990 by former Olympic gymnast Li Ning — as the main Chinese sportswear brand at the event. But both brands have been able to take advantage of their position as local players aligning with the ongoing guochao movement that sees patriotic consumers show their pride by buying locally designed or made goods.

For international sportswear brands like Nike, Adidas, Reebok, Puma, New Balance, Under Armour and others, the opportunity to target the China market at the Olympics typically involves partnering with individual athletes or teams.

Adidas is dressing the Chinese women’s volleyball team and athletes like tennis player Wang Xinyu. Puma has entered into endorsement deals with Zhang Ru from the national women’s basketball squad, and Wang Lanqin, Jiang Weize and Zou Yang from the national men’s team. Under Armour has tied up with the county’s 3x3 men’s basketball team and women’s volleyball player Zhu Ting. Fila has designed China’s skateboarding team uniform and Nike has dressed China’s women’s basketball team as part of a long-term collaboration.

Insights from a report on earned media value (EMV) compiled by influencer marketing agency Lefty for BoF show that most sponsors for Chinese athletes are from sportswear, consumer goods and food industries, said Liu Chuhan, business analyst at the firm. Tracking athletes participating in the Olympics from January 1 to July 22, it analysed a total of 297 influencers with a particular emphasis on fashion and beauty category engagements on Weibo.

Despite a controversy on Weibo over its latest video, Nike came out on top as the most visible fashion, sports and beauty brand on Chinese socials — securing EMV of $194,000 through 27 posts. Lefty found runner Wu Yanni and tennis player Zheng Qinwen among the stars amplifying the brand. Prada ranked second, generating an EMV of $127,000 and Adidas third with 108,000 earned from seven posts.

According to Lefty’s methodology, which used a CPM (cost per thousand impressions) of $13.75 for Weibo posts and videos and $5.50 for Douyin videos, the most bankable Olympic athlete was swimmer Zhang Yufei who has partnerships with Omega, generating $419,000 in EMV. Zhang was followed by table tennis player Ma Long, who is linked to Chinese brand Erdos, Omega and Prada. In third place was Sun Yingsha.

Fashion media champion female athletes

In the run up to the Olympics, Chinese fashion publications have been full of sports-related and athlete content.

Balenciaga selected gold medal swimmer Pan Zhanle as its cover star for So Figaro China’s issue which was released on the same day as Balenciaga’s Shanghai show back in May. Brands have also been leaning into the games for advertorials such as Wonderland magazine’s collaboration with Anta.

“It’s the perfect moment for magazines to raise ad income,” journalist Liu said.

Elsewhere, Harper’s Bazaar China featured an off-duty Zheng Qinwen in a black Balenciaga blazer on its August cover — the only nod to her profession was the handle of a tennis racket poking out of a handbag.

Marie Claire China featured theretired Olympic gold medallist ‘diving queen’ Guo Jingjing wearing Bottega Veneta and Cartier shot in Paris. Magazines have also been publishing Olympics-inspired shoots such as August’s Vogue China starring model Ju Xiao Wen and Elle China’s story with model Lina Zhang.

“The Ju Xiao Wen Vogue shoot got very positive feedback,” Liu said.

The editorials of female athletes and fitness-themed models have been amplified on China’s digital channels where the empowerment of women through sports is a particularly hot topic. A recent Douyin report outlined how women athletes now receive much more attention from the public than in the very recent past; half of the top ten most followed athletes on the social platform are now women.

“Ultimately, because the pool interested in sports has widened since China hosted [the Olympics]… it offers [brands and publications] more possibilities — especially for women-centric content,” Liu explains

Malmsten believes that it is female athletes’ proclivity to present themselves as multidimensional figures which can lead to “a high ROI (return on investment) for fashion and lifestyle brand partners.” Seen through this lens, brands that collaborate with the likes of hurdler Wu Yanni, already a personality off the track, could be tipped as marketing winners at this year’s Paris games — especially if she takes home a medal later this week.

Another might be tennis star Zheng Qinwen, who won gold in the women’s singles over the weekend, a first for the Chinese Olympic team. Nike, which had featured Zheng in a new advert just before the games started, wasted no time in celebrating its own marketing gold. Sports Illustrated summed it up with the headline: “Nike takes victory lap [in]...perfectly timed commercial.”

LVMH’s second-largest fashion brand Dior was until last month behind on disclosures required by UK law about working conditions in its supply chain, and made outdated statements on its website of a third-party certification that it terminated more than a year ago, Reuters has found.

In Britain, the Modern Slavery Act of 2015 requires companies with UK turnover of £36 million ($46 million) or above to publish annual statements on their websites detailing the steps they are taking to combat forced labour in their business and supply chains globally.

Until July 19, Dior’s UK website showed an anti-slavery statement from 2020 and a sustainability certification that was no longer valid, a Reuters review of company filings showed.

Dior, part of $345-billion conglomerate LVMH that is getting a global marketing boost as major sponsor to the Paris Olympics, has come under the spotlight after Italy’s competition authority on July 17 said it was probing whether it and Italian label Armani had misled consumers over their commitment to craftsmanship and social responsibility following a judicial investigation that exposed potential sweatshop-like conditions at some Italian contractors.

The investigation prompted Europe’s top asset manager Amundi and other investors to ask LVMH to take more aggressive steps to monitor its suppliers’ treatment of workers, these investors have told Reuters.

Dior has condemned the illegal practices uncovered at some suppliers, said it had stopped working with them and that it was cooperating with authorities. Armani has expressed confidence in a “positive result following the investigation.”

Dior published a 2023 modern slavery statement after Reuters enquired on July 18 about its compliance with the UK regulation. The new document says it was approved by subsidiary Christian Dior UK’s board on July 18.

In its updated modern slavery statement, which is longer and more detailed than its 2020 one, the French brand said Christian Dior UK plans a training course to raise employees’ awareness of modern slavery and to encourage them to take action if they suspect wrongdoing.

“We have been preparing an up to date modern slavery statement, which...has now been published on our website,” Dior said in a written statement on July 19 in reply to Reuters’ inquiries about the anti-slavery disclosure.

As of Aug. 5, Dior also had not published statements for 2021 and 2022. The company did not directly address Reuters questions about its missing statements.

Although publishing the statements is mandatory by law, no company has been penalised for not complying, according to Sara Thornton, professor of modern slavery policy at the University of Nottingham’s Rights Lab. Some lawmakers and rights groups are pushing for penalties to be introduced.

In 2020, Britain’s Home Office estimated that 83 percent of eligible organisations complied with the Modern Slavery Act.

LVMH on July 19 said in an email to Reuters that its UK-based Dior subsidiary applies “group wide procedures concerning respect for human rights and addressing modern slavery risk in our business and supply chains.”

Another subsidiary, Parfums Christian Dior UK, has published British modern slavery statements for 2021, 2022 and 2023.

LVMH chief financial officer Jean-Jacques Guiony said in a call with analysts on July 23 the conglomerate was unaware of the alleged worker exploitation at the Dior suppliers in Italy, adding LVMH “accepted full responsibility for what happened.”

Guiony said LVMH would “intensify” controls over its supply chain, adding that it planned to strengthen audits and controls of its subcontractors.

‘A Certified Approach’

Until July 19, the sustainability page of Dior’s website also featured the Butterfly Mark, a certification by luxury-focused sustainability audit firm Positive Luxury, which assesses companies on 23 environmental, social and governance issues.

Above the Butterfly Mark logo, a statement titled “A Certified Approach” said Christian Dior Couture obtained the certification in 2021 “following a rigorous audit”, adding that it “attests to the authenticity of its sustainability strategy.”

In June 2023 Dior, which was due to start its reassessment process, decided not to do so, CEO Amy Nelson-Bennett told Reuters on July 17. “Their Butterfly Mark certification and community membership was therefore terminated,” she said.

Brands are required to remove the certification mark within 90 days after deciding not to be reassessed, Nelson-Bennett said. Dior removed the certification mark and accompanying statement in July 2024.

Approached by Reuters, Dior and LVMH did not respond to a request to comment on the certification and the logo on the website.

Positive Luxury currently certifies, or is reviewing, roughly 170 brands, including LVMH-owned Belvedere Vodka. Its audit asks companies and brands to answer hundreds of questions on environmental, social and governance issues, including how much oversight a brand has on suppliers.

Positive Luxury reassesses all the brands that it certifies every two years, adjusting its audit to keep up with new regulations, Nelson-Bennett said.

Companies are gearing up for new European Union supply chain rules that require tighter audits of suppliers to mitigate human rights and environmental risks.

By Helen Reid and Mimosa Spencer; Editors: Josephine Mason, Vanessa O’Connell and Lisa Jucca

Learn more:

Is Luxury Finally Set for a Sustainability Reckoning?

Amid growing disillusionment with luxury brands, a series of Italian investigations linking major players like Dior and Armani to sweatshop labour is putting new pressure on the sector’s most powerful asset: brand image.