Posts Tagged ‘Stefano Ricci’

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

Thursday, September 13th, 2018

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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