Burberry destroyed $37.8 million (£29 million) worth of its own goods last year, prompting “environmental concerns” from its shareholders.
Amid its full year results last week, the 162-year-old fashion house reported revenues of £479 million, up from £478 million a year prior, but admitted to destroying tens of millions worth of inventory.
This figure, which included the destruction of $13.76 million (£10.56 million) in beauty inventory and $24.04 million (£18.45 million) in ready-to-wear products and accessories, grew from a total of $35.6 million (£27.32 million) the previous year, and has nearly tripled since 2014.
Shareholders have raised concerns about the staggering amount of products the luxury retailer wastes, especially since growth slowed in its first quarter.
One investor questioned why shareholders were not asked if they wanted to purchase the goods at its AGM.
Its outgoing chairman John Peace said destroying stock was “not something we do lightly”, while chief financial officer Julie Brown added that the brand took it “extremely seriously”.
As Burberry operates multiple licenses in numerous markets, they do not retain complete control of their production, meaning some factories can tamper with design copyright and release sub-par quality items.
To offset the potential negative effects on the brand, luxury fashion houses often decide to destroy or buy back their collections.
However it is understood that destroying unused products could also help brands which import into the US benefit from a return on certain taxes.
According to the US Customs and Border Protection Agency, “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.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
