(Bloomberg) -- A Milan court put a unit of the French fashion house Christian Dior under judicial control citing alleged labor violations, an Italian official said.

Manufactures Dior Srl, which produces in Italy luxury bags and accessories for LVMH’s Dior, didn’t “prevent and stem labor exploitation within its production cycle,” the Italian police said in a statement. Subcontractors exploited undocumented and illegal workers and failed to comply with labor, health and safety rules to slash production costs, according to the statement.

Representatives for Dior and LVMH were not immediately available for comment. The news was earlier reported by Italian media, including Il Corriere della Sera which cited the prosecutors’ office.

In Italy, a court can put a company under judicial control, that envisages a temporary management by a judge, if the firm allegedly took advantage of unlawful business conducts by third parties, including suppliers. 

Christian Dior Couture is LVMH’s second biggest fashion label according to estimates by HSBC, generating about €9.5 billion ($10.2 billion) in sales last year. LVMH doesn’t break down revenue by brand. Dior, known for its famous bar jacket, is run by Bernard Arnault’s oldest child, the 49-year-old Delphine Arnault.

The Dior case followed an investigation into Giorgio Armani SpA for the similar labor issues. In April a Milan judge placed the manufacturing unit of Armani under the same measure for alleged workers exploitation.

--With assistance from Antonio Vanuzzo and Angelina Rascouet.

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