Loro Piana Expanded Vertical Integration Strategy
The luxury label deepened its control over production by bringing specialized knitwear finishing in-house.
Updated on Oct. 1, 2026 in Business Strategy
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Loro Piana, a brand acquired by LVMH in 2013, has significantly tightened its manufacturing control by inaugurating a new knitwear plant in Ghemme, Italy, in September 2026. This move reflects a broader strategic pivot to internalize production steps previously handled by external partners.
Why it matters
By bringing specialized functions like knit-ironing under its own corporate umbrella, the company aims to eliminate dependence on third-party suppliers and hidden subcontractors. This model prioritizes supply chain visibility and product consistency over the rapid scalability offered by outsourcing.
Loro Piana maintains its commitment to craftsmanship through long-term vertical integration, evolving from its 1924 founding in Piedmont. The company now oversees its own spinning, weaving, and specialized finishing departments.
The players
Loro Piana
A luxury textile and clothing manufacturer known for its focus on high-end raw materials and full vertical integration of the production process.
LVMH
A global luxury goods conglomerate that maintains a portfolio of prestigious brands and acquired Loro Piana in 2013.
Frédéric Arnault
The current CEO of Loro Piana who oversees the brand's strategic direction and manufacturing operations.
The details
The brand's operational model involves sourcing raw materials globally from regions including Mongolia, Australia, New Zealand, and Peru, then refining them through internal facilities. By acquiring firms specializing in delicate processes such as ironing precious knits, Loro Piana reduces reliance on external vendors. This deliberate control helps the company maintain quality standards while bypassing the risks associated with subcontractor oversight.
Timeline
1924: Loro Piana was founded in Piedmont.
1980s: Loro Piana began producing garments under its own label.
2013: LVMH acquired Loro Piana.
September 2026: Loro Piana inaugurated a knitwear plant in Ghemme.
October 2026: Loro Piana opens a flagship store in Tokyo.
Market Landscape
Loro Piana's investment mirrors a broader luxury industry trend of moving away from subcontracting to maintain brand prestige. This strategy follows a pattern set by top-tier houses that prioritize supply chain transparency over the lower costs typically achieved by outsourcing production.
Operators should monitor whether internalizing high-skill finishing stages provides a sustainable margin advantage compared to outsourcing. Review your own supply chain to identify whether critical product-defining processes remain vulnerable to external subcontractor volatility.
The takeaway
Vertical integration acts as an effective buffer against the quality risks inherent in multi-tiered supplier networks. Conduct a quarterly audit of your most critical manufacturing processes to determine if any outsourced functions are essential enough to bring in-house.
Further reading
For more on the operational benefits of supply chain ownership, see our guide on Business Strategy.
Source note: This article includes information reported by South China Morning Post.
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