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One Rule for them and One Rule for us: A Case Study into Loro Piana

Earlier this week, Marcelo Rochabrun published an article in Bloomberg exposing Loro Piana and the way it treats its supplier of one of the finest wools in the world. All of the context behind the issue can be found in Rochabrun’s article, specifically the interview with Andrea Barrientos who is one of the producers of Vicuna wool in Lucanas, Peru. This article seeks to show the consequences of Loro Piana’s business conduct in how it affects the attitudes individuals have towards luxury brands within the conversation surrounding sustainability. 


After Rochabrun’s article in Bloomberg, Congressman Robert Garcia sent a letter to Loro Piana Chairman Antione Arnault and Chief Executive Damien Bertrand, requesting answers to Congress by the end of April. Congressman Garcia can be quoted saying This seems to me as clearly exploitation and it is a huge multinational corporation that is owned by some of the wealthiest people in the world.” If the Congress of the United States is to take action against Loro Piana, this article will include some suggestions that could be considered in order for Loro Piana to act more sustainably. 


Vicuña wool: A brief explanation and history

For a more in depth explanation of what vicuña wool is, it is worth checking out Rochabrun’s article. The vicuña is one of four existing species of South American camelids. Whilst the majority of the world’s Vicuña population inhabit Peru, they can also be found in Argentina, Bolivia, Chile, and Ecuador. Vicuña wool is renowned to be the finest and most expensive wool in the world. 


Historians have found that vicuña wool has always been associated with the wealthiest individuals in society. Both the head of the Inca Empire and Philip II of Spain were found to have linens made out of vicuña. In 1609, the Inca historian Garcilaso de la Vega reported “Others could not wear that wool under penalty of death.” The process of catching vicuñas has not evolved much from the ritual adopted by the Inca population. This process is called “chaccu” which is a Quecha word adopted by Spanish chroniclers in the 16th century. 


Vicuñas were nearly hunted to the point of extinction in the early 20th century. Consequently, trading Vicuña wool was made illegal by the Peruvian government in 1969. In 1982, the United Nations passed a treaty which allowed the trading of vicuña wool under the provision that a portion of the income gained from sales goes towards benefitting the Indigenous Andean population. However, the sale of vicuña wool was not made legal until 1992 by President Alberto Fujimori. 


Currently, there are over 200,000 vicuñas in Peru, accounting for over half the world’s population. Predominantly, Loro Piana sells vicuña wool; other sellers include Zegna, Brunello Cucinelli, and Giorgio Armani. At Loro Piana, vicuña wool products range from $2,000 all the way to $50,000. 


Loro Piana: What is it?

Loro Piana was created by Pietro Loro Piana in 1924 and has become synonymous with “quiet luxury”. In essence, luxury materials with minimal branding worn by individuals with an ultra-high net worth. In 2013, the conglomerate LVMH acquired 80% of Loro Piana as well as a further 5% in 2017. Bernard Arnault, who is in control of LVMH, is the world’s richest person with a net wealth of $226 billion.


What led to Loro Piana Exploiting the Peruvian Workers?

When Peruvian President Fujimori opened up the sales in 1992, Loro Piana won the exclusive rights to sell vicuña wool. Two years later, the first legal shearing of vicuña took place in the Lucanas region. In 2000, with the collapse of the Fujimori government, a decree was passed giving private companies the same right as the indigenous communities to shear vicuña wool as long as they own the property that the vicuña is sheared on. 


The decree passed in 2000 was a turning point in the relationship between Loro Piana and the indigenous communities in Peru who produce vicuña wool. Now that private companies were granted the power to buy land in Peru, Alfonso Martinez, who worked for the Peruvian government, set about regulating the emerging vicuña market. Martinez would soon leave the government to set up his own company which acted as an intermediary between the Peruvian workers and the companies that wished to buy the wool from them. In 2007, Loro Piana hired him as their Chief Executive Officer of its Peruvian branch of operations. In 2010, Loro Piana’s application to shear vicuñas on the land it owned was approved, making it the first company that was able to shear vicuñas without paying indigenous communities for the fiber. So far, Loro Piana owns 2,000 hectares of land in Peru and has proposed building an 8 mile fence around the land to prevent the vicuñas from leaving the land and getting sheared by someone else. The proposed fence also ensures that the population will grow at a maximum rate of 50% annually at the cost of genetic diversity and life expectancy for the vicuñas. As a result of Loro Piana’s expansion of land ownership in Peru, the Lucanas region has decreased its production of vicuña wool from 1,877 kilos in 2012, to 460 kilos in 2022


How the workers in Lucanas were treated changed in 2013 when LVMH acquired the majority stake of Loro Piana. Before changing ownership, Loro Piana were committed to consistently paying the workers in Lucanas a high price for their part in obtaining vicuña wool. In an interview with the Telegraph, Pier Luigi Loro Piana, one of the two Loro Piana brothers who led the company, said “we support them by buying constantly at around $400 per kilo” regardless of the amount of vicuña wool produced that year. Compared to the price of $400 per kilo that was being paid before the LVMH takeover, Loro Piana paid $330 in 2022 and just $280 in 2023 according to Roberto Carlos Sarmiento, the Lucanas community president. 


How does Loro Piana’s business practices relate to sustainability?

Put simply, the current power dynamics between Loro Piana and the workers in Lucanas is skewed in favour of Loro Piana. Consequently, Loro Piana is able to take more from Lucanas than it gives. This culture of consumption does not adhere to sustainable business practices and should be addressed if Loro Piana wants to claim sustainable approaches to the production of their garments.


In 1969, when the law placing vicuñas under protection was passed, the vast majority of Peruvians who inhabited the same regions as the mammal were illiterate. The poverty rate in those regions exceeded 80% with the main occupation being a farmer. Peru as a country has experienced economic development in the subsequent decades. In contrast, the Andean regions, where the majority of the vicuñas reside, remain some of the least developed in Peru. According to the most recent calculation, in 2018, it was found that 41% of the population of the Lucanas region live on less than $91 a month. Still, the preponderance of houses in Lucanas are made out of mud and have no plumbing. Serfor, a Peruvian wildlife and forestry agency, came to the conclusion that the vicuña trade “does not improve the quality of life of peasant community members.” It also found that the revenue raised from tourism is greater than that produced by the vicuña trade. The position that the Andean population finds themselves in is a direct result of the unequal power balance with Loro Piana. The power imbalance has allowed Loro Piana to severely underpaid the workers for materials that they use to construct their garments that are then sold for tens of thousands of dollars. 


How can Loro Piana become more sustainable?

Without addressing the obvious answer of recommending that Loro Piana increase its financial contribution to the Andean population in return for vicuña wool, this article calls for more opportunities to be given to the Andean communities. Most, if not all, Peruvian workers have never even come into contact with a garment made out of vicuña wool, let alone have the opportunity to make something out of it. There are multiple ways in which to solve this problem. First, Loro Piana could provide the people of Lucanas with the machinery necessary to weave  vicuña. Secondly, Loro Piana could create a scheme where they could hire some of the workers who harvest the wool to become one of the tailors that works on constructing the wool into the garment. Lastly, Loro Piana could focus on other ways in which they can give more power to the Andean population by moving them up the supply chain. By giving more resources and technology to the workers in Peru, Loro Piana would relinquish the consumption culture that they have been exhibiting for the past decade. This would send a message to other luxury brands that sustainability has to be prioritised over profits, not just for the good of the climate but also for the good of the individuals that they employ. 


Conclusion:

Most of the dialogue surrounding how to make the fashion industry more sustainable focuses on fast fashion companies and rightly so. This article has shown that it is not just fast fashion companies that overlook sustainability in their business practices and that if sustainability is to be tackled within the fashion industry, luxury brands also need to be present in the aforementioned discussion. Loro Piana has become increasingly unsustainable in the past decades and it has only just been called out on its failure to take sustainability seriously. This needs to change. 


Sources:

Marcelo Rochabrun, “The Vicuñas and the $9,000 Sweater”, in Bloomberg, 2024.

Business of Fashion, US Lawmaker Demands LVMH’s Loro Piana Answer for ‘Exploitation’ in Peru,  2024.

ECOLEX, Convention for the Conservation and Management of the Vicuna, n.d.

Zegna, The Fibre of the Gods: Vicuña, 2024.

Brunello Cucinelli, Vicuña, 2024.

Giorgio Armani, Vicuña, 2024.

Loro Piana, Men’s Vicuña Clothing, 2024.

Forbes, The World’s Real-Time Billionaires, 2024.



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