October 12th, 2011
08:37 AM GMT
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Hong Kong (CNN) – Gucci stores in Shenzhen, China are facing allegations from former employees of operating as high-end “sweatshops,” according to reports earlier this week in China’s English-language newspapers, China Daily and Global Times.

In late September, five former employees released online an open letter to senior executives of the Italian designer brand, including claims of a draconian list of employment regulations such as time limitations on bathroom use and unpaid overtime extending past midnight.

A Gucci spokesperson told Chinese media, “Gucci does not and will not endorse or tolerate the alleged malpractices.”

Employees said they needed to seek permission for basic activities such as drinking water and bathroom breaks were limited to a maximum of five minutes.

They also complained of having to stand for more than 12 hours per day and work extensive overtime without compensation.  While the official store closing time is 10:00 p.m., employees were required to stay as late as 3:00 a.m. to conduct inventory checks.

One of the five employees in the letter, surnamed He, told the Global Times, “Two of my former colleagues had to have abortions because we all had to stand so long each day.”  The employee also spoke of other health consequences among staff: "Many of us ended up with various occupational diseases as a result of these inhuman rules. I have been suffering from stomach and urinary system illnesses."

The lawyer representing the five employees, Yang Qianwu, told the Global Times that each employee is demanding an average settlement of 100,000 yuan in overtime wages over their more than two years of employment.

In an e-mail statement to Chinese reporters Tuesday night, Ben Huang, Gucci’s Director of Marketing and Communications in China, said that Gucci is paying close attention to the recent media coverage and has conducted an investigation of the complaints. The company has also hired an external consultant to evaluate its store management in China.

Huang said Gucci has already taken a series of measures, including the dismissal of store managers involved in the situation. The company has also improved internal communications and training and will seek to continuously improve the working environment in its stores.

Xinhua reported that Gucci has asked its employees to refrain from commenting on the matter to the media.

According to China Daily, the case has also attracted the attention from the Shenzhen government.  An official from the labor and human resources bureau from Luohu district has promised to investigate the case, while the deputy director of the Shenzhen Trade Union encouraged employees to report workplace abuses.

Chinese netizens have expressed outrage on the popular micro-blogging site Sina Weibo, criticizing lax government controls over workplace conditions.

User LiuSuorHuanHuan commented, “Why do large foreign enterprises always have problems when they enter China? …Chinese policies have too many loopholes that create opportunities for foreign investors to use them toward their advantage.”  Another user, Sartorialist, wrote, “The main reason behind these blood factories of foreign companies in China is the lack of monitoring and excessive tolerating by local government.”

As China has become the ‘world’s factory’, worker complaints of sweatshop conditions to produce the goods and services of multi-national corporations are nothing new.   The Global Times quoted a former manager at Gucci’s Beijing office saying that “mistreatment of employees is rife at all levels in the brand's mainland stores.”   A user named MinGanCi sarcastically commented that “…Gucci management is truly aware of China’s customs—they have already localized their treatment of employees.”

- CNN's Nini Suet and Haolan Hong contributed to this report

Posted by: ,
Filed under: BusinessChina


soundoff (48 Responses)
  1. Dr Lindi Engelbrecht

    Why do you not investigate and report on the fact that the Chinese skin animals alive to make leather and fur clothes? The general public does not know this. It is horrific and sickening and just as important if not more so than this article. Those animals cannot run away and has no choice whatsoever.

    October 12, 2011 at 11:01 am |
  2. Lol@CNN

    To the person above, f u. This article is about Chinese people getting abused by their employers... stop talking trash about Chinese people you European beggar!

    October 12, 2011 at 12:02 pm |
  3. China expert.

    They oly asked 100000 yun. That is like 10 thousand Euro. That is nothig for Gucci. They should ask more from Gucci since they made a crime against humanity by cooperating with a regime like CHinese Empire. Gucci know what is happening in China, how Chinese Empire is killing Uyghur, Tibetans and democratic chinese people. Gucci must pay more for their crime. I am surprised those workers have not gotten threat from the Chinese Regime. Next step. Gucci pays the Chinese go, and Chinese gov will threat those who are sueing Gucci.
    Foreign enterprises are allowed to exploit Chinese workers. Chinese gov make sure those workers get punishment if they protest. This is the only secret how Chinese Regime have become so rich, Why china is an attractive place to produce " made in China".

    October 12, 2011 at 12:07 pm |
  4. Name*ab

    Why are they complaining of maltreatment? Av thex gone out to see the way chinese investors treat their employees elsewhere? i.e africa

    October 12, 2011 at 12:40 pm |
  5. tumw

    Ok whoever posted the BS about skinning animals alive, there is absolutely no reason why anyone would skin an animal alive, since it's really bad for fur and extremely hard to do. Dead fur on the other side comes off quite easily. Stop listening to hysterical BS.

    October 12, 2011 at 12:43 pm |
  6. WYSIWYG

    name*ab....Another stereotype and demonising statement about chinese people?

    Been reading to much western driven and sponsored media that is out to make a quick buck.???

    Africans also accuse Indian,Lebanese and every other foreign investor of the same and including those from their own africans.

    October 12, 2011 at 12:53 pm |
  7. Gary B. Sanford

    Gucci and other multinational corporations rely on slave labor for huge profit margins. The only threat they will bow to is any assault on those profits. Quit buying. It's that simple.

    October 12, 2011 at 1:05 pm |
  8. jesus

    The foreign mulitnationals are exploiting china and making immoral profits out of the blood and sweat of chinese people
    and other nations. It was reported that Western people have become richer and richer at the expense of the rest of the world.Read http://www.fin24.com/Economy/Westerners-better-off-20111011

    October 12, 2011 at 1:06 pm |
  9. Beerbarrel

    This is inhumane. Let's all boycott Gucci.

    October 12, 2011 at 1:06 pm |
  10. jesus

    Is it not unprofessional and unethical for an "educated" person like a Doctor to make such statements about chinese people

    October 12, 2011 at 1:08 pm |
  11. jesus

    This white south african surnamed doctor needs to make an apology

    October 12, 2011 at 1:10 pm |
  12. jesus

    @beerbarrel...Would you not agree ??
    Lets boycott Gucci and demand they improve the working conditions of their chinese workers who sweat and toil for peanuts to make their beautiful quality products so that they can sell them at enormous profits worldwide..?

    October 12, 2011 at 1:19 pm |
  13. wysiwyg

    Its ironic.When I google Dr Lindi Engelbrecht she claims to be from an "ethical' and "moral" place..I seriously doubt this.

    October 12, 2011 at 1:23 pm |
  14. Kyle H. Davis

    Perfect example of the mentality within China, not only within its work ethic, but its society as a whole.

    So, instead of bringing it up to the headquarters, they allowed themselves to be treated like animals by the Chinese managers, waiting until life threatening illness occurs before they notify anyone. And thus begins the vilification of another foreign company, working in China, because of the actions of Chinese people.

    No foreign company works in China that isn't part of a "joint venture", meaning that they are forced to give up over half of their interests in the company to a Chinese company. But the "slave driving" wasn't attributed to the Chinese side at all, just the foreign brand name that isn't even a majority holder of the business in China.

    Earlier this month it was ambushing Apple for pollution created by Kaedar Electronics, a manufacturing company contracted to produce Apple products in China. Of course nobody mentioned the fact that the same company was producing for Chinese brands like Lenovo and BenQ... it was just another part of China's vilification of everything foreign.

    I see it daily here.

    October 12, 2011 at 1:27 pm |
  15. Kyle H. Davis

    Oh, and for those who do not know it... the "I worked so hard I had to have an abortion" is the equivalent of wearing a neck brace to trial in a whiplash case in the US. Pretty much a "go to" ailment.

    October 12, 2011 at 1:43 pm |
  16. Kyle H. Davis

    And for those of you who are sitting around claiming that they are using the labor to reap profits all over the world... you obviously have no clue about what is going on in China. China is the second largest importer of luxury goods in the world. And Gucci is as popular as rice in China. Quite a different perspective when you realize that the bags they are making are being bought by their own countrymen.

    October 12, 2011 at 1:47 pm |
  17. mary

    @Kyle...I would think, with time, the chinese people will not allow anyone to treat them the way they may have been treated.
    I would think if they started in any small way...its is a good start. Then the rest of us must them support them
    Until then we should have patience and respect them.
    Every country goes through the same .

    October 12, 2011 at 1:54 pm |
  18. D

    This is the kind of practice where businesses (people) who put money and profits first before everything else. They couldn't care less if the employees (human lives) suffer and eventually die young as long as they earn their monies and profits. They worship money like nothing else, and this naturally gives rise to the utmost self centreness, selfishness that baffled even those with the slightest compassionate heart. Asians, Europeans, Americans, Africans, don't matter. Wickedness comes to all people, it is a true matter of the heart, not the skin color, not the culture.

    October 12, 2011 at 2:17 pm |
  19. jesus

    @d ....praise the "lord" "amen" ..goodwill to all "man"

    October 12, 2011 at 2:24 pm |
  20. and

    Wal-Mart stores closed and fined over falsely labeled pork in SW China

    CHONGQING, Oct. 9 (Xinhua) - The government of Chongqing municipality has shut down ten Wal-Mart stores that have been accused of fraudulently selling ordinary pork as organic pork, according to the local administration of industry and commerce on Sunday.

    The ten Wal-Mart stores and two other stores that were acquired by Wal-Mart are accused of selling 63,547 kilograms of falsely labeled pork over the past two years, which generated approximately 730,000 yuan (114,500.82 U.S. dollars) of illegal income, said Huang Bo, director of the Chongqing Administration of Industry and Commerce.

    The city has fined the stores 2.69 million yuan, Huang said, adding that Wal-Mart has been punished by the local government 21 times since 2006, when the company entered Chongqing, for exaggerated advertising and selling expired and substandard food.

    October 12, 2011 at 2:44 pm |
  21. eddie2010

    Oh no! My boss makes me stand up all day long! And he gets mad when I spend half the morning in the bathroom! Seriously CNN, you are trying to dig up "dirt" on China and this is the best you can come up with? I mean I know it's Gucci, so well done for feeding the whole class envy thing, but come on. What a non-story. Sweatshops. You want to see a sweatshop come to a third world hospital and see how many hours we doctors work without sleep.

    October 12, 2011 at 3:09 pm |
  22. Calan

    Why didn't the employees quit and find another job instead of working there for two years? I'm guessing because there are 4 million more people waiting to fill their vacancy.

    October 12, 2011 at 4:22 pm |
  23. Bwin1

    I'm presuming these managers were actually Chinese and not Italians. I would bet that it's the Chinese who are guilty of treating their employees this way. Btw, I'm Asian American. However, I would also guess that upper management (Italian) stood behind this behavior and condoned it, and made their managers take the fall for the misconduct.

    October 12, 2011 at 4:26 pm |
  24. Bwin1

    In China, it's very important to give birth to a healthy baby. A less than healthy individual would be a drain on the family. These poor people struggling in low paying jobs like Gucci's can little afford to raise a child with special needs. It's a responsibility thing, and I can certainly understand why someone would have an abortion if she had been working under hard conditions during a pregnancy.

    October 12, 2011 at 4:50 pm |
  25. lolface

    So its only OK if China owned companies are sweatshops? I mean most people are paid 90 cents an hour and yet are "not sweatshops". What a bunch of B.S.

    October 12, 2011 at 4:55 pm |
  26. LORENZO

    Once upon a time there were coal miners in southern Ohio, Mr Collins was the owner and operater he owned not only the mines but, also the houses they lived in and the local store in which they purchased thier wares. Evolution is an ongoing process and the crimes inflicted upon the poor and poverished is a story never ending. My heat goes out to these lives which poduce all the squam which we purshase, it may be better to give these people the $2 dollars which we spend for some nonsense, this is where I feel the top 1 percent compete for this market, we are the sucker fish.

    October 12, 2011 at 5:18 pm |
  27. wysiwyg

    @BWIN1
    Then Gucci should respect and understand.
    The chinese government has been warning these mulitnationals.I say close Gucci down just like walmart

    October 12, 2011 at 5:47 pm |
  28. alex

    do not mix the China government and the common chinese people. the common people just like us. they just want to live better , having a house to live and food to eat. However, the greedy party take most of their earn away. It is not the fault of the abused common people.

    October 12, 2011 at 8:53 pm |
  29. nothing against the chinese don't get me wong.

    Gucci do excellent shower lotion – shame about this report. If U read the above comments the issue of animal rights is mentioned. Thankgoodness. Whoever has had the time and effort to read this – thankyou and trust you will now go on to read about the Isreali prisoner swap as this is obviously the main story of the day. God Bless Ya.

    October 12, 2011 at 11:05 pm |
  30. I heard Uncle Ben just died - oh well, no more Mr Rice Guy.

    After futher review, listening to some classic music and the guilty pleasure of sucking my thumb, it is wrong and cruel to make/force people to work in sweat shop conditions. Thanks CNN for this comments page. Ian.

    October 12, 2011 at 11:47 pm |
  31. Speaking to you from Manchester. Manchester - It's wet here.

    The shower lotion that Gucci do is called Guilty and has better soul and body compared to say the Jean Paul Gaultier Le Male shower lotion however that does not give them the right to abuse and punish thier workers in cruel and unpleasant ways & the classical musical music I am listening to is on classic fm. Ian Robinson7@hotmail.com. I think there are just some rather uncaring people outthere in Gucci ville.

    October 13, 2011 at 12:29 am |
  32. ianrobinson7@hotmail.com

    I also agree that multinational corporations rely on slave labor for huge profit margins.

    October 13, 2011 at 12:32 am |
  33. sothisischina

    So, if Gucci is going to be of this class.....they can keep their puses and whatever line of clothing they have. They finished up how I feel about them. Sweatshops.......CORPORATES, AND WE ARE BEING ROBBED BLIND. KEEP IT OVER THERE AND SEE IF YOU CAN SELL IT GUCCI.........TRASH!!!

    October 13, 2011 at 1:30 am |
  34. sothisischina

    CLOSE GUCCI DOWN JUST LIKE WALMART......I HATE SHOPPING THERE, RUBBISH!!!

    October 13, 2011 at 1:33 am |
  35. sothisischina

    I REMEMBER VICTORIA SECRET CLOTHING.....ITS ALL MADE IN PRISON......BY THOSE WHO ARE SENTENCED THERE FOR YEARS. WHEN IN MY COLLEGE DAYS..........THIS WAS TOLD TO ME BY A PROFESSOR AND IT NEARLY KNOCKED ME OUT OF MY SHOES. I DONT BUY VICTORIA SECRET PRODUCTS ANY LONGER.........NO WAY.......BE SMART...........DO YOUR RESEARCH :)

    October 13, 2011 at 1:38 am |
  36. ChrisinChina

    Boy, there sure are a lot of non-experts on China here. A few people bashing Gucci for condoning the labour practices in China. You are ignorant of the facts.

    Gucci , and other companies, have almost no idea what goes on in their factories until employees bring the matter up to them. The factories are owned and operated by Chinese. The only involvement Gucci (and other multi-nationals) has is usually by email or telephone with the factory owners and supervisors. If they do happen to visit the factory, they inform the owners in advance, so the owners clean everything up, and when the reps arrive, everyone is smiling and appearing to enjoy their work. The owners will also make sure that it is "payday" and give the workers good paycheques to make it look like they are well-paid. When the Gucci reps leave, those owners will make the workers do overtime to "earn" the salaries they just got.

    These factories also have several sets of accounting books. All have different numbers in them. One set for the government, one set for the product owner (in this case, Gucci), and a set with the real numbers in it so that they can keep track of where the money is really going (usually into pockets).

    As well, if they are aware that there is a problem, and they try to address it on their own, the factory owners will tell them that it's an internal affair of China and not to interfere in those affairs. The employees can't do anything to improve conditions because they'll just get fired. Factory owners will inform other factory owners that that employee is a troublemaker, so they won't be able to find another job in the area. The employees can't form a trade union because trade unions are illegal in China, so they just do whatever they are told, no matter how bad it is.

    Don't blame the corporation, like Gucci, Walmart, Apple, or even Mattel. Blame the Chinese bosses who are running their own countrymen into the ground, all in the name of getting rich. You can thank Deng Xiaopeng and his "To be rich is glorious" comment for that one.

    Oh, and for all the Chinese Nationalists and 50-centers who are now going to call me a China-basher ... all I have to say is, "The truth sucks, don't it?"

    October 13, 2011 at 3:40 am |
  37. wysiwyg

    @CHRISINCHINA

    For a moment it sounded you were referring to many factories worldwide.

    The end of the day it shows how chinese workers and the enviroment are exploited by foreign companies in china.
    Obviously these foreign companies benefit financially at the end of the day and it shows in their balance sheets.
    eg Apple,Gucci etc.....
    If these companies claim to come from an "ethical and moral" place then they are the most guilty because if it
    was not the chinese people they were exploiting it could be malaysians,filipinos or vietnamese.

    October 17, 2011 at 9:17 pm |
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  42. Dugoth

    No surprises here. It's all a race to the bottom for profit maximisation. This is what you get when you arrive at The Bottom. The best thing Gucci could do is take the manufacturing out of China. But what Gucci did not do was create a legally binding contract on their suppliers to force them to behave in a morally and ethically acceptable way.

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    This is really bad, i mean, sweatshops are all like this?! I feel sorry for those people. Remember the suicide in Foxconn? Terrible thing

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  48. campbell

    something said in this article are not in line with reality. Maybe the senior executive of GUCCI did not know the empolyee were being abused. but they were obliged to know the reality. if they falt to be got informed, there must be something wrong with the operation structure. actually, i guess,just like most TNCs in China, the senior level all know that the lower staff are being abused, but they condone it for huge profit margins. the conclusion: TNC is evil. all TNCs get out of China.

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