Glossy Podcast: Victoria’s Secret earnings, Torrid store closures, Disney vs. Midjourney, and luxury’s labor exploitation problem

This week, we talk about Victoria’s Secret’s earnings report and the expected impact of its three-day web outage due to a cyberattack on the company. We also talk about the mall brand Torrid closing down 180 stores, and discuss a lawsuit filed jointly by NBCUniversal and Disney over AI image generator Midjourney’s alleged copyright infringement.

Later in the episode, we talk about recent probes into the manufacturing practices of luxury brands like Dior. One probe, conducted by an Italian competition authority, found that Dior was sourcing products from workshops in Italy where underpaid immigrants worked in grueling conditions to create its handbags. These workers, some of whom were undocumented, worked long shifts, with energy signatures indicating that the workshops were running 24 hours a day.

As part of a settlement, Dior agreed to pay $2.3 million over five years toward initiatives to reduce labor exploitation. The sum — just 0.0023% of Dior’s $84 billion annual revenue — was seen by some activists as an inadequate slap on the wrist.

Both the probe and its settlement put a spotlight on some of the luxury industry’s open secrets — namely, that the product you buy for thousands of dollars was most likely made for just a fraction of that price.

Instead, luxury brands’ value is based primarily on their name, image, reputation and heritage. The product itself, while typically high quality, is marked up significantly. LVMH, for example, typically has around 70% profit margins on its products.

But probes into the actual labor practices that luxury brands use can damage that image, as seen when TikToks allegedly showing how luxury handbags are really made went viral earlier this spring.