Sweatshop allegations leave Gucci under fire

The Gucci security men muttered briefly into their headsets and one or two ladies who lunch had to be discreetly helped from the gleaming store with their designer carrier bags. But the only overt sign of discord was the protesters chanting: "What's outrageous? Sweatshop wages."

The disruption to the designer outlet on Sloane Street – London's gleaming millionaires' row of boutiques ranging from Chanel to Valentino – might have been fairly minimal, but the alarm that yesterday's protest and dozens of others like it across Europe and America is rousing in Gucci's huge parent company is considerable.

Pinault Printemps Redoute (PPR), the French retail conglomerate that owns Gucci and dozens of other luxury and high-street brands, is the target of a campaign by unions and protest groups over the buying practices of some of its best-known subsidiaries. Last year the international group had sales of €27.8bn (£18bn).

Campaigners, led by Unite, an American union that is locked in battle with a PPR company in America, allege that workers for a series of sub-contractors used by the conglomerate in Asia are being paid as little as 44p a day by companies that flout international labour standards.

The claims focus on PPR's catalogue arm, Redcats, which runs a series of mail order brands around the world including La Redoute and Empire, both of which operate in Britain.

Among the campaigners' allegations is that a supplier in Bombay, Patel Hosiery Mills, pays home workers 0.64p per garment, forcing them to use their children for labour to make a living.

At Marfi Garment Corporation, based in the Philippines, workers are allegedly paid below the minimum legal wage. Many live in single-room shacks on a diet of rice and dried fish while borrowing money to feed their families.

The claims were highlighted in a report on PPR by a French think-tank two weeks ago. The French Centre for Business Information (CFIE), which spent six months investigating PPR, said: "We have experienced some difficulty in obtaining precise information about [Redcats'] supplier arrangements ... It has been reported that suppliers and sub-contractors in developing countries have violated several terms of national legislation on working hours."

Such a picture could not have been further removed from the polished marble shopfronts on Sloane Street yesterday. The group of about 15 protesters, including members of War on Want and Globalise Resistance, spent 90 minutes chanting outside the Gucci outlet with effigies of the brand's two top designers, Stella McCartney and Tom Ford.

The gathering was viewed with consternation by staff and Knightsbridge regulars. Chris Eubank, the boxer famed for his dapper clothing, left the store without commenting. Flore Beaumont, 43, a self-confessed "Gucci addict", said: "I understand their point but I'm afraid it won't stop me coming here."

Thomas Kamm, who is in charge of drawing up a code of conduct for all PPR companies and suppliers, said the group vetted all its sub-contractors including those mentioned by its opponents. "We uphold basically the standards and the laws of each supplier country and all our factories are audited," he said. "It could not be more wrong to say we run sweatshops."

The company said Redcats had severed ties with one of the suppliers mentioned in the CFIE report and was setting up bureaux across Asia from which buyers would ensure standards laid down in its code of conduct were met.

But campaigners said they did not believe the code would be policed by the company. Laura Dubinsky, a Unite representative who attended yesterday's protest, said: "PPR has got to recognise that public opinion is against it ... and until they do so we will continue standing outside Gucci stores."