Service of Live and Learn: Did You Know Unsold Luxury Fashions & Accessories are Destroyed at Season’s End?

September 13th, 2018

Categories: Luxury, Retail

Burberry Scarf. Photo: uk.burberry.com

I knew that mutilated US currency is destroyed but I didn’t know that at the end of a season unsold luxury goods are as well. Matthew Dalton explained the practice in a recent Wall Street Journal article and reported that one internationally known brand—Burberry–is bucking the custom.

“Destroying unsold inventory is a widely used but rarely discussed technique that luxury companies perform to maintain the scarcity of their goods and the exclusivity of their brands. In Italy and many other countries, they can also claim a tax credit for destroying the inventory.”

Stefano Ricci suit. Photo: Stefanoricci.com

Dalton also wrote that one Italian menswear brand, Stefano Ricci, fills dozens of boxes–it sells its fashions in Italy, China and the U.S.–with cashmere suits, silk ties and cotton shirts and ships them off to be burned. “The companies hired to incinerate the clothing film the destruction so that brands can prove to the Italian tax authorities that their inventory has truly gone up in smoke.” The owner would like to give some of the clothing to charity “but the tax credit ties the company’s hands.”

He also reported that the Swiss conglomerate that owns Cartier bought back unsold watches worth “hundreds of millions of euros in recent years…. which were piling up at retailers because of a drop in demand from Chinese consumers. The company pried off the jewels and melted them down, but is reusing the materials.”

As I noted above, Burberry Group won’t be following suit, bowing to pressure by environmental groups “who say it is wasteful.” [Now that we know I doubt these groups are the only ones to share this point of view!] “The amount of stock Burberry destroys had risen sharply in recent years, from £5.5 million in fiscal year 2013 to £28.6 million in the last fiscal year.” And Dalton added that the brand’s younger target market is particularly concerned about the environment. It will no longer sell fur. Elizabeth Paton who covered the story for the New York Times wrote that the company is researching sustainable materials with a group at the Royal College of Art in London.

Gucci Fall 2017 menswear collection. Photo: gq.com

High end holdouts don’t want to see their goods deeply discounted as “luxury goods command higher prices because they are inherently more valuable.” Gucci reuses cloth and leather and claims that it destroys a “relatively small” part. In addition, “it unloads unsold clothes through discounts for friends and family and through outlet stores.”

Decades ago I bought a traditional Burberry raincoat that I still wear every fall and spring. The quality of the material is unequalled—the cuff and coat edges have never frayed; the lining is solid. It cost a king’s ransom but given its longevity was fairly priced. I can’t attest to the quality of luxury goods today nor do I know how many people who buy them would dream of wearing them this long even if they lasted. I’ve always been too practical. When I’ve bought eccentric bits of clothing I’ve paid as little as possible. Even if I could afford them, the unconventional looks customers expect from some luxury fashion designers will date themselves too quickly for my taste.

Did you know that high end manufacturers destroyed their goods? I understand the reasoning behind the convention to preserve the value of fashions and accessories, but the practice doesn’t seem fitting today, do you think? Dalton doesn’t say what Burberry will do with its leftovers. How might companies protect their exclusivity and extravagant prices yet skip the step of annihilating their products–or should they continue the process?

Ballon Bleu de Cartier Photo: cartier.com

 

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7 Responses to “Service of Live and Learn: Did You Know Unsold Luxury Fashions & Accessories are Destroyed at Season’s End?”

  1. Martha Takayama Said:

    I had heard recently about Burberry destroying, its leftover inventory and was appalled. I found the concept nearly fraudulent, disgusting as well as irresponsible and inhumane.
    It makes the concept of “luxury” goods and those who buy them seem very superficial individuals at best if not downright gauche and conscienceless.

    I am especially fond of fine leathers because my grandmother worked as a handbag salesperson as a young women. I appreciate fine textiles and chic design. However, in a world filled with starving refugees from myriad groups or ethnicities crowded in settlements or on the street, how could any executive consider destroying items that could provide cover, warmth or shelter for the less fortunate.

    If a luxury item can be effectively produced and trashed, doesn’t that mean that the customer who purchases it is being totally manipulated? Do any concerns about labor, ecology, sustainability and mankind enter into this decision?

    Why not produce less and if stuck with excess reduce the merchandise at a later date to recoup some profit. To deliberately convert it to waste becomes as immoral as it is stupid.
    If Burberry is in fact trying to rethink this behavior I wish them luck. They might try cutting off labels, or marking things as imperfection and giving them to the less fortunate or freezing homeless. In the meantime please refer to Uniqlo, the Japanese eminently accessible, practical, socially conscious company’s practice with regards to clothing and donations:http://www.uniqlo.com/en/sustainability/10MillionWaysToHelp/

    Despite my appreciation of fine materials and craftsmanship I want to distance myself from items protecting their brand and their profits by exploiting their customers and the less fortunate. It is also important to remember that good taste and refinement are not expressed through using customers as sandwich boards for brand names.

  2. Jeanne Byington Said:

    Martha,

    Burberry may be the first one to turn the tide on the practice. We’ll see how it goes and who follows them.

    Good idea to cut out labels. Loehmans, a once famous now defunct discounter, did just that. They got sloppy at the end but early on only a few sales people and the true fashion followers knew who the designers were. I never cared: If the item looked good on me and if the price was right, I bought it. I recall someone in the dressing room urging me to buy an unbecoming dress. “But it sells at Saks for $X.” It surprised me anyone would buy something for that reason.

    If I won the lottery tomorrow I would still be a discount shopper and I’d not pay $thousands for a blouse or handbag, though if a friend or family member would appreciate such a thing, I’d consider giving either as a gift.

    There are so many copy cat manufacturers who rush out and within days a celebrity wears something on a red carpet are selling similar items. Manufacturers have curbed a lot of the fake watches and handbags sold on Canal Street. I haven’t been there in a while but would bet some shops still thrive doing his.

    I too love Uniqlo. I’ve not felt as warm in a winter coat as I have in my Uniqlo quilted one. My husband wears the Heatech long sleeve undershirts year around.

  3. Protius Said:

    This reminds me of right after World War II. I was a young boy whose head had been pumped full of naïve, idealistic Roosveltian thinking, and one day I discovered that our government was destroying vast quantities of perfectly good food even though I could see for myself that many millions all around me did not have enough to eat. I was horrified and irretrievably disillusioned. (Last I heard, we are still doing it.) Now I am old and cynical, and like to think that I don’t care, but I still do.

    Maybe it is easier to make a case for destroying luxury goods, but I can’t think of one that really holds water. We human beings are really backward creatures.

  4. Jeanne Byington Said:

    Protius,

    At one point the government supported the cheese/butter industries in states like Wisconsin and I think we stored and then tossed tons of each yearly. With so many hungry people, as you observed, here as well as abroad, I couldn’t understand why public schools and colleges and shelters and nursing homes and nonprofit hospitals weren’t sent these wonderful, essential products and once they had their fill, refuges and the poor worldwide.

    This story only proves that there is so very much more I don’t know that I should have come upon by now. Scary really.

  5. HW Said:

    Tiffany is an interesting case study. How to keep the beautiful traditions while moving the brand into the future is indeed challenging!

  6. Jeanne Byington Said:

    HW,

    Tastes have changed so dramatically that I wonder how Tiffany will continue to appeal to the very wealthy, the moderately comfortable, the aspiring to be comfortable as well as the young and mature–or if they won’t try. In every country they might target a specific customer and hope for the best.

    In my early 20s, newly married and off to be an Air Force wife with an income about as far removed from that of a Tiffany’s customer as any you could imagine the staff could not have been more gracious and welcoming, hoping we’d order things etc. [We were registered at the store.] We were told they knew we’d pay our bill faster than many of their wealthier customers! I have neither visited nor ordered something from Tiffany’s in a dog’s age, but I believe ASK, in a previous comment, and her description of the new Tiffany’s. I hope this legendary brand, like so many, doesn’t lose its way.

  7. Lucrezia Said:

    Good move by Burberry. Waste is disgraceful, so perhaps other entities in the fashion industry will wake up and follow suit.

    PS I’m guilty on two counts: 1) Having no clue of what happens in the fashion world. 2)Not caring whether it sinks or swims.

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