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FILE PHOTO: The exterior of a Burberry store is seen in central London, Britain, November 3, 2017. Picture taken November 3, 2017. REUTERS/Toby Melville/File Photo - RC1CE13B6BB0
Reuters/Toby Melville
Burberry is changing course on how it treats its unsold stock.
OPEN SECRET

Burberry won’t burn unsold goods anymore, but what about brands that didn’t get caught?

Marc Bain
By Marc Bain

Fashion reporter

This July, Burberry drew a lot of criticism after disclosing in a financial report that it had destroyed £28.6 million (about $37 million) in what it deemed unsaleable merchandise in its recent fiscal year.

Now the company has announced it will stop destroying old unsold stock immediately. Instead, it will work to expand its already existing efforts to “reuse, repair, donate or recycle unsaleable products.”

The reversal marks a victory for those who felt Burberry was being wasteful, and reflects a changing perspective on the idea of luxury and what customers expect from the brands they buy. Critics had savaged the practice as environmentally unsound and just plain irresponsible—and investors at its annual investor meeting reportedly voiced their displeasure as well (paywall).

To really have an impact though, the whole rest of the fashion industry would need to follow along.

It’s an open secret in fashion that companies destroy old merchandise. To make all that clothing uses up natural resources already, and then to dispose of it, a brand might burn it, releasing fumes from fibers like polyester, or render it unwearable and toss it out to likely end up in a landfill.

Brands do it to preserve the image and equity of the brand, keeping it exclusive in the eyes of shoppers, ensuring it doesn’t enter grey-market sales channels, and preventing counterfeiters from getting hold of it. “It is a widespread practice in the fashion industry, it’s commonplace,” Arnaud Cadart, a portfolio manager at Flornoy and Associates, who had previously been a luxury-industry analyst, told Agence France-Presse. “Once you do some private sales to employees and journalists, it’s dumping.”

Burberry, which had to work to restore the cachet of its signature check after it became widely knocked off and overexposed for years, just happened to be slightly more transparent about the practice. Cadart noted that brands generally put the losses in their financial statements under vague phrasing like “impairment of inventories,” though even if you’re looking for these figures they may not be directly reported.

Which is all to say that Burberry is just one part of an industry-wide issue, and brands have no incentive to publicize their own numbers. That’s particularly true as they try to attract young shoppers, who increasingly expect them to consider their environmental impact in how they conduct business, and are likely to see a product being “sustainable” as a mark of prestige.

“Modern luxury means being socially and environmentally responsible,” Burberry CEO Marco Gobbetti said in a statement about the decision, which also included the news that Burberry will cease using real fur in its collections.

Plenty of shoppers would probably be happy not to know exactly how brands keep their expensive goods exclusive. There’s also an argument to be made that scrapping old, unwanted merchandise clears the way to make more, keeping people in work.

But from an environmental perspective, there’s no good justification for destroying unsold clothes, which puts much of fashion in a tricky position. Keeping control of excess inventory and where it winds up is important to keep a brand’s image up, but until more brands follow Burberry’s lead, the industry will continue to be hugely wasteful.

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