Burberry Group PLC, which has been in the crosshairs for burning tens of millions of dollars of its products, is far from the only firm to destroy unsold goods to maintain the exclusivity and luxury mystique of their brands.
In its annual report the British fashion firm acknowledged that it had burned unsold clothes, accessories and perfume worth £28.6 million (US$37 million).
More than one-third of the products destroyed were perfumes, which the company said was due to the rupture of its license with US fragrances manufacturer Coty Inc.
Since Thursday, when that piece of information buried in its 200-page report came to light, Burberry has come under scrutiny on social and news media for the practice.
However, industry experts say Burberry is far from alone.
“It is a widespread practice in the fashion industry, it’s commonplace,” said Arnaud Cadart, a portfolio manager at Flornoy & Associates who has previously followed the luxury industry as an analyst.
He said very few luxury brands hold sales to get rid of stock and instead destroy unsold products. Fashion items with short cycles increases the amount of leftover stock and items destroyed.
“Once you do some private sales to employees and journalists, it’s dumping,” he said.
Burberry on Thursday said it had measures in place to minimize its amount of excess stock, that it takes its environmental obligations seriously and harnesses the energy from burning the items.
“On the occasions when disposal of products is necessary, we do so in a responsible manner and we continue to seek ways to reduce and revalue our waste,” the firm said.
The destruction of goods is reflected in financial accounts, but in a manner “difficult to comprehend, often under an entry ‘impairment of inventories,’” Cadart said.
French luxury giant LVMH Moet Hennessy Louis Vuitton SE said in its latest annual report that “provisions for impairment of inventories are ... generally required because of product obsolescence [end of season or collection or expiration date approaching] or lack of sales prospects.”
Hermes International SCA’s annual report also spoke of product “obsolescence,” notably finished seasons or collections.
“Yes, there is a moral, ethical question as well as protecting the environment, but from a legal point of view, the brands are destroying genuine products which they own, products that are at the end of their life or the season, and they can do what what they want” with them,” said Boriana Guimberteau, a specialist on intellectual property law with law firm FTPA.
Guimberteau said a tenet of maintaining brand image is that exclusive products should be sold in exclusive distribution networks and that markets should not be flooded with end-of-season products.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary