Burberry under fire over stock destruction

By

Sandra Halliday

Published
Jul 19, 2018

Burberry is under fire over its strategy for disposing of surplus stock with criticism similar to that earlier faced by H&M, showing that it's not only the mass-market that destroys unsold goods rather than recycling them.

A report on Thursday highlighted how the luxury company destroyed more than £28 million worth of unwanted products in the past year, and the value of its waste products had risen 50% in just two years and more than sixfold in the period since 2013.

That doesn't necessarily mean that the company is getting worse at predicting what will sell, it's simply producing much more as its sales steadily expand globally. 

But regardless of that fact, a large amount of waste is clearly an issue and one that is unlikely to go down well with a large number of the eco-aware Millennial consumers the label wants to buy its product.

The Times reported that over £90 million of Burberry products have been destroyed over the past five years and as well as potentially upsetting customers, this is also not going down very well with some shareholders. One at its annual general meeting asked why the unsold products were not offered to the company's private investors.

The company admitted that the surplus products are disposed of by burning, although it said that it works with specialist incinerators that can harness the energy produced from the process. Energy from waste is a growing trend globally although, again, Burberry’s approach may not appeal too much to customers as consumer assumptions about the kind of items used to produce energy tend to focus more on leftover cardboard boxes and the like, rather than high-priced fashion items.

Burberry is in a difficult position, being caught between consumer and shareholder opinion, a regulatory environment that is increasingly likely to punish those who don't recycle and a need to carefully control distribution of its products so they don't reach the ‘grey’ market, or counterfeiters. Product getting into the wrong hands could dent its brand image as it works to move even more upmarket.

Burberry defend itself by saying that it takes waste "extremely seriously" and that the latest year’s surplus was due to the fact that it had to destroy more cosmetics than usual because of the start of its deal with Coty. 

The newspaper approached a number of other UK luxury brands to ask what they do with their waste but only Temperley replied. It said unsold clothes were either donated to charity or sold through its Bicester Village outlet store.