Burberry has announced that it threw out $37.8 million in products.
According to an article on Bloomberg, Burberry has announced that it threw out $37.8 million in products in its 2017/18 annual earnings report. That is more than the $35.7 million of products the brand threw out last year.
The $37.8 million includes $13.76 million in “beauty inventory”, which means the rest is ready to wear and accessories. The brand’s throwing out of unwanted products shows that its efforts to increase sales and profits are unfinished, according to Bloomberg. Investors, however, have said they have “environmental concerns” about the business model.
Burberry isn’t the first brand to be criticized for this. Earlier this year Richmont was buying back its luxury watches and throwing them out in an effort to “save their brand value”. Louis Vuitton has been criticized for years with reports that say the brand burns excess leather goods in order to avoid selling bags on discount and ruin the brand as one of the most popular luxury brands in the world.
Nike was also criticized for throwing away products after a dumpster behind one of the brand’s stores was found with bags of cut up sneakers.
Brands basically don’t want to sell products on discount, have people wearing their products without paying for them, or have their products resold on websites like eBay. Which also means you have to pay full price if you want the brands newest or iconic styles.
Brands may also benefit from the return of certain duties, taxes, and fees for importing products into the US. According to US Customs and Border Protection, ”if imported merchandise is unused and exported or destroyed under Customs supervision, 99 percent of the duties, taxes or fees paid on the merchandise by reason of importation may be recovered as drawback.”
Given that some of the most expensive duties tend to be on imported clothing, brands can get a pretty good refund for unsold products.
Regardless, it’s still pretty wasteful. Throwing products away wastes materials. Materials that can be reused to make other products. Brands could simply have products stored in the back of the store and sell it at full price until it sells out. They could also stop making so many products and make them much less available like Hermès does with its products. That would make brands have to throw out less products and increase demand for some of their most popular products.
So, what do you think? Should brands be throwing out their products? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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