The destruction of extra merchandise keeps designs out of the hands of counterfeiters.
20 Jul, 2018FORTUNE.COM
British luxury fashion brand Burberry has allegedly burned more than ?28 million (more than $32.6 million) of its merchandise in the past year in an attempt to stop counterfeiters from copying their styles.
According to The Times, more than ?90 million in Burberry products have been destroyed in the past five years.
The practice, apparently common in the fashion industry, has spurred criticism from shareholders and consumers who worry about waste and environmental impact. Burberry, however, says it only destroyed items with its trademark and worked with companies to harness the energy from the burning, The Telegraph reports. The company also recently joined the Ellen MacArthur Foundation’s Make Fashion Circular initiative to reduce fashion waste.
“Burberry has careful processes in place to minimise the amount of excess stock we produce,” said a spokesperson, according to The Telegraph. “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.”
Retail Gazette says there may be a monetary motive for the destruction of stock, as brands can see a return of taxes on unused imports if the items are destroyed.
They cite the U.S. Customs and Border Protection Agency, stating, “if imported merchandise is unused and exported or destroyed under customs supervision, 99 per cent of the duties, taxes or fees paid on the merchandise by reason of importation may be recovered as drawback.”
Burberry is on the high end of luxury fashion brands -- its classic trench coat sells for $1,990. According to MarketWatch, retail revenue for the first quarter of 2018 was ?479 million ($635.3 million).