It’s no more ‘burn, baby, burn’ for Burberry
Bowing to environmental groups, Burberry committed last week to cease the practice of destroying unsold products. The move comes after the fashion house admitted in its annual report in July that it burned $37 million worth of inventory it deemed unsellable last year.
“Modern luxury means being socially and environmentally responsible,” said
Marco Gobbetti, Burberry’s CEO, in a statement.
The destroyed products were generally those that did not sell via discount outlets and were more than five years old. Burberry said in its statement that it already reuses, repairs, donates or recycles unsaleable products and would expand on these efforts. A strategy to produce fewer, more targeted collections is also expected to reduce excess stock.
The revelation of its wastefulness in July from Burberry sparked a furor over such practices in the fashion industry and came only months after Richemont, the owner of Cartier and Montblanc, revealed it bought back unsold stock from retailers during a recent downturn and recycled the precious metals and stones used in the high-end pieces.
Destroying unsold goods or burying them in landfills is said to remain a common practice as luxury brands seek to maintain their exclusivity and avoid having inventory wind up in outlet stores or secondary “grey” markets.
“We do not like to sell our goods in discounted stores,” Niccolò Ricci, CEO of the Stefano Ricci, the Italian high-end menswear label, told The Wall Street Journal. “It’s giving respect to the clients and the workers.”
Stefano Ricci also earns a tax credit for destroying stock.
Luca Solc, an analyst at Exane BNP Paribas, told Reuters that Burberry’s move may force other fashion houses to be more transparent about how they dispose of unsold stock.
Burberry also followed Gucci, Yoox Net-a-Porter, Versace and others in announcing it was ending the use of fur. The decisions come as younger generations are placing a high priority on ethical and sustainable practices.
- Burberry Ends Practice Of Destroying Unsaleable Products – Burberry
- Burberry ends bonfire of the luxuries after waste outcry – Reuters
- Luxury brands including Burberry burn stock worth millions – The Times
- Why Luxury Brands Burn Their Own Goods – The Wall Street Journal
- Burberry burns bags, clothes and perfume worth millions – BBC
DISCUSSION QUESTIONS: Is it acceptable for luxury brands to destroy unsold stock to maintain product scarcity? Did Burberry make the right move, and do you see other luxury brands making the same commitment?