Burberry's admission it burns stock might just help the fashion industry

It was a small group of statistics buried in Burberry’s 200-page annual report that caused all the outrage. But while the numbers referenced with the line “finished goods physically destroyed during the year” were just business as usual for the fashion industry, to everybody else it was US$35.6 million (Dh130.7m) worth of luxury products going up in smoke. In revealing that it burns unsold clothes and cosmetics to prevent the brand from entering the “grey market” – where items are sold at knockdown prices from unofficial retailers – Burberry does offer a caveat.

The brand says that it disposes of items in an environmentally friendly manner, harnessing the energy from it during the process. It was an explanation that did little to douse the flames rising on social media, digital ire combining furiously with pithy hashtags (#Burnberry, anyone?).

How has Burberry done the fashion industry a favour?
But perhaps the British heritage brand has inadvertently done the fashion world something of a favour. Through its overt transparency, a multibillion-dollar industry that has long been riddled with bad practice and waste, could finally be required to account for its actions.

“The fact that Burberry destroys stock is not a surprising revelation for those with knowledge of the industry,” explains Sass Brown, dean of Dubai Institute of Design and Innovation. “This has been a long-time practice to ensure the exclusivity of product.”


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It's not just Burberry burning clothes

Last week, a story hit the headlines about the fact that beloved British brand Burberry had destroyed over £28m of clothes and perfume last year. The outcry was immediate and widespread: that the clothing had not been donated to those in need was described as “indefensible” by users on Twitter, while some people said they’d be taking their Burberry clothing to the nearest charity shop. But if you work in fashion, the fact that luxury houses and high street brands alike routinely burn millions of pounds worth of stock (including samples and unsold products) is an open secret – albeit an incredibly bleak, very #HumansOfLateCapitalism one.

Why do brands burn? Well, there’s the fact that hefty markdowns can hurt a company’s image of being exclusive and always in-demand; a row of messy sale rails in a luxury boutique selling handbags that cost more than the average person makes in two months doesn’t exactly scream, ‘THIS IS A WORTHWHILE INVESTMENT’. If the market becomes oversaturated with cut-price products, it can negatively impact a label’s prestige – brands need their high prices to seem justifiable, and exclusivity is a key part of that. While many high-end companies operate their own outlets, they are perhaps less willing to palm off unsold stock to chains – after all, who is going to shell out for a cashmere coat if it might end up in TK Maxx in a few weeks?

Then there’s the argument that destroying clothing is protection against counterfeiting – if enough stock is sold cheaply enough to end up in the wrong hands to be copied, a brand’s intellectual property is at risk. Counterfeiting is a huge, and illegal, industry reportedly worth $450bn – where vulnerable people like undocumented immigrants are regularly exploited for low-cost labour, including in the UK. According to the UK’s Anti-Counterfeiting Group, intellectual property crime helps to fund other kinds of illegal behaviour, including the smuggling of drugs, guns and people.

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