The Art of Slowing Down
140: Blockchain & Blue Dials: A Closer Look at Luxury’s Accountability Crisis
Before I dive into today’s piece, I wanted to say a quick thank you to all of the subscribers who have supported this endeavor over the past 18 months. What started out as a personal project to do travel write ups and short opinion pieces has evolved into a current Substack “Best Seller”. It’s exciting that I can provide an opinion that others find valuable and I will continue to ensure that I am putting out work that I would use myself and that adds value. With that said, let’s get into my thoughts on LVMH “tokenizing” traceability and Tiffany x Patek Philippe’s recent drama and my thoughts on luxury earnings so far.
As I wrote earlier in the week, on July Italian courts in Milan placed LVMH’s Loro Piana under court administration. The judicial oversight is set to last for one year and came amid disturbing labor violations tied to its subcontractors. Italian prosecutors found that migrant workers at several Italian production sites were forced to work far beyond legal hours, slept on factory floors, and earned wages far below Italy’s minimum standard. The court cited Loro Piana’s repeated failure to conduct adequate due diligence across its supply chain, despite selling sweaters that retail for upwards of €2,000.
Frédéric Arnault, Loro Piana’s Chef Executive Officer, has said nothing about this issue as far as I am aware. In fact, the only information I have been able to find about LVMH addressing the problem, has been buried in an article stating that[1]:
“Luxury conglomerate LVMH has begun piloting a new traceability system across its major brands following fresh court action against its subsidiary Loro Piana over alleged labour exploitation in its supply chain… LVMH, the world’s largest luxury group, which acquired 80% of Loro Piana in 2013, is responding by expanding its use of TextileGenesis, a blockchain-based traceability platform.
The system documents the journey of materials, such as the origin of cashmere for Loro Piana scarves and the sourcing of leather for Louis Vuitton handbags, to ensure supply chain transparency and accountability… TextileGenesis founder Amit Gautam confirmed that demand for supply chain verification has surged since last year’s cases involving Dior, underlining that the luxury sector can no longer rely solely on heritage and brand image to secure consumer trust.
“Brands are realising that consumers now expect verification, not just storytelling,” said Gautam. “The luxury sector must adapt to this new reality.”
Naturally this led me to question, “what is TextileGenesis and why is this the first time I’m hearing about them?”