By  on October 14, 2009

MILAN — Prada SpA has signed an agreement with Italian union CGIL to put 250 employees in “Cassa Integrazione,” or on temporary work suspensions via special public funds.

The affected workers, who will take a rotation leave of between four to six weeks, are employed in one of Prada’s largest production plants for accessories in Levanella a Montevarchi in Tuscany.

Alessandro Mugnai, secretary of Filtea, the fashion arm of CGIL, one of Italy’s leading unions, explained the move is a way to make up for a cyclical and in-between-seasons decline in production, coupled with a general slump in consumer demand because of the recession.

“There always is a production slowdown between the spring-summer and fall-winter seasons and normally companies compensate with leftover vacation days. Since these days companies prefer their employees to take their vacation days, temporary suspensions are one way to go,” said Mugnai.

The special funding is financed by the government and protects up to 80 percent of workers’ incomes over fixed, short-term periods.

He added that unlike many of its competitors that outsource manufacturing to third parties, about one-third of Prada’s production is done in-house.

According to Mugnai, over the summer, Prada streamlined operations and became more cost efficient by acquiring total control of Santa Croce, a high-end leatherwear specialist, and by creating three distinct manufacturing divisions for footwear, leather goods and apparel.

Prada officials were unavailable for comment.

The company’s move is less drastic than that of other luxury goods brands such as Chanel, Burberry, Cartier and Swarovski, which have laid off employees in the face of the economic downturn.

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