What to Know
- Burberry's annual report says the company destroyed $37.5 billion worth of merchandise.
- Some commentators believe the company destroyed their products to keep the brand elite and prevent counterfeit products from being made.
- Burberry released a statement that when they dispose of items, they do so in a careful process.
Luxury fashion label Burberry has come under the spotlight after it revealed in its 2018 Annual Report it destroyed millions of dollars of clothing and perfume last year to protect its brand.
The annual report for the British company says it physically destroyed $37.5 million of clothing and beauty items last year, an increase from the previous year.
First reported in The Times and now picked up worldwide, the U.K. newspaper said that shareholders were unhappy with the amount of clothes destroyed, with one asking at a meeting last week why the unsold products were not offered to the company’s private investors.
Some brands, like Temperley, say they don't destroy their unsold clothes, they donate them to charity. The reports saw a discussion erupt on Twitter about the ethics of destroying clothes when people are living in poverty.
"This makes you feel an odd sense of anguish and doom," comedian and actor Russel Brand weighed in.
But Burberry had been working to make its brand exclusive again, after seeing a rise in counterfeit Burberry products, Manchester Metropolitan University principal lecturer on the fashion business Maria Malone told the BBC.
Destroying unwanted products is part of that process, she said. "The reason they are doing this is so that the market is not flooded with discounts," Malone told the BBC.
Burberry also isn’t the first company to destroy goods, CNBC points out. Richemont, a maker of luxury jewelry and watches including the Cartier brand, was reported to have disposed of 481 million euros ($557.2 million) worth of goods in May to prevent them being discounted on the secondary market, reducing their appeal.
Burberry said it takes the waste problem seriously and more of its beauty products had to be destroyed this year since the franchise was sold to Coty, a U.S. cosmetics company.
A spokesperson for Burberry emailed a statement to CNBC, "Burberry has careful processes in place to minimize the amount of excess stock we produce. On the occasions when disposal of products is necessary, we do so in a responsible manner and we continue to seek ways to reduce and revalue our waste."
The company says in its annual report that it is "committed to reducing, reusing and recycling any waste we create." They are partnered with Elvis & Kresse, a sustainable luxury company, to turn 120 tons of leather into new products.