The Hidden side of luxury Value distribution, subcontracting, and labour rights in fashion supply chains: a comparative analysis.

This thesis investigates how different production models within Global Value Chains (GVCs): fragmented outsourcing, vertical integration, and governed outsourcing shape the risk of labour exploitation in the fashion and luxury industries. While labour abuses in global supply chains are widely documented, less attention has been devoted to understanding how organizational structures themselves influence firms’ capacity to monitor working conditions and prevent violations. The research adopts a qualitative comparative case-study methodology, examining three distinct models: Tod’s, representing fragmented outsourcing within territorially concentrated but organizationally dispersed Italian districts; Cinelli, exemplifying vertical integration and direct control over production stages; and Walmart, illustrating governed outsourcing through extensive supplier standards, audits, and compliance mechanisms. The analysis integrates corporate documents, investigative reports, academic literature, and international regulatory frameworks in business and human rights. Findings show that fragmented outsourcing increases the organizational distance between lead firms and lower-tier suppliers, limiting visibility and enabling cost pressures to cascade downward, thereby heightening workers’ vulnerability. Vertical integration reduces these risks by centralizing control, though it may limit flexibility. Governed outsourcing partially mitigates the loss of control through due diligence and monitoring tools, yet structural economic incentives and the limits of private auditing constrain its effectiveness. The study concludes that labour exploitation risks are not solely the result of weak enforcement or isolated misconduct but are embedded in the organizational logic of global production. Effective prevention requires not only corporate governance and due diligence but also regulatory frameworks capable of addressing systemic governance gaps. The thesis highlights the need for stronger, binding due diligence obligations to ensure meaningful protection of labour rights across supply chains.