HOW do luxury brands up their value? Celebrity endorsement, stellar marketing and a good brand image may come to mind.
But many consumers of luxury brands are unaware that the cultivation of value may also involve a flame thrower.
In a viral post on X, netizen Hosun claims that Burberry burns $36,500,000 of clothes in one year, estimated at RM161,678,344.28 (as at 12/11/24).
Burberry burned $36,500,000 of clothes in one year.
Not because they couldn’t sell them.
Because they didn’t want YOU to have them.
The disturbing truth about luxury’s dirtiest secret🧵 pic.twitter.com/jdvgFiRQPE
— Hosun (@hosun_chung) November 11, 2024
He added that the luxury brand does it not because it could not sell the products, but because they do not want consumers to have them.
The post has since drawn the attention of many netizens with over 12,000 shares.
Hosun pointed out that in Burberry’s 2018 annual report, there was a shocking line within which most people missed—the systematic destruction of $36.5mil worth of perfectly good merchandise.
Hoseun went on to state that over five years, Burberry has destroyed $118mil worth of products, from pristine trench coats, never-worn scarves to brand new perfumes.
Hosun further claimed that this is a calculated strategy used across the luxury industry.
“They use specialised waste disposal companies to destroy unsold goods, complete with strict security protocols and documentation,” he said, adding that Richemont destroyed $563mil worth of watches.
“These brands don’t sell scarcity. They manufacture it,” he said.
Hosun also cited the tax loophole, where in the US, companies can claim back 99% of import taxes by destroying goods if customs officials supervised the destruction.
“They make more money burning clothes than selling at a discount,” he said.
According to Hosun, most luxury brands would rather destroy their products than risk them entering the “grey market,” the unauthorised resale of authentic products.
“This parallel market makes up 20-30% of luxury sales in some regions,” said Hosun.
Marketing Mind on Linkedin extended the list, stating that even Zara, Gucci, Louis Vuitton to Cartier and Nike also incinerated their unsold merchandise.
Thankfully, the incineration of unsold goods is increasingly being criticised in an era defined by the climate crisis, where civilisations can no longer afford to burden the environment further.
Fashion & Law Journal said that while there is no established legal framework that outright condemns this practice, it has become clear that this needs to change.
Pressure from consumers, environmental activists, and even the United Nations is mounting on the fashion industry to stop contributing to the worsening climate crisis.
Many brands are now facing growing consumer backlash alongside stricter government regulations.
The Fashion & Law Journal in the 2022 dated article mentioned that Burberry has since released a statement saying that it shall no longer destroy its unsold products anymore. —Nov 12, 2024
Main image: barrons.com
