Industry 5.0 envisions a future where seamless collaboration between humans and robots enhances efficiency, innovation, and coevolution. While collaborative robots have found widespread applications in manufacturing, particularly in tasks like pick-and-place and assembly, their integration into handcrafted manufacturing processes presents unique challenges. This article focuses on advancing technology in the less-explored field of cobot-assisted handcrafted manufacturing, specifically in the fashion industry, with a priority on reducing work-related risks. In handcrafted processes, which often involve intricate and artistic work, cobots face challenges related to nuanced decision-making, adaptability to customizations, and the need for precise manual dexterity. The study delves into the cobot-assisted polishing of leather shoes, addressing issues associated with product delicacy, process and knowledge formalization, versatility, and integration into existing manufacturing processes. To overcome these challenges, the research proposes the application of cobots in the initial polishing phase, which is the most physically demanding, allowing artisans to focus on finalization, quality control, and process supervision. The study also applies the concept of human-in-the-loop (HITL) and virtual reality simulation to optimize collaboration, ensuring safety, ergonomics, and efficiency. The article contributes to the scientific and industrial communities by pioneering the study of collaborative robotics in craftsmanship, successfully implementing human–robot collaboration (HRC) in an industrial setting, demonstrating the effectiveness of virtual simulation and HITL, and prioritizing human factors throughout the design and development of HRC. The insights gained from this research are crucial for achieving practical solutions in industrial environments while aligning with the performance objectives of companies and workers’ well-being.