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British fashion house
Burberry Group
PLC said it would stop burning its unsold inventory, shedding light on a technique that luxury goods companies have been quietly using for years to maintain the exclusivity of their brands.
Thursday, Marco Gobbetti, chief executive of Burberry, said the company would immediately stop its practices, after announcing in its annual report last June destroyed 28.6 million pounds ($ 34.6 million) of clothing and other goods. 26.9 million the year before. Critics of environmental groups rose during the summer.
"Modern luxury means being socially and environmentally responsible," said Gobbetti.
High-end brands destroy unsold products to protect their image against discounts when inventory is found in factory outlets or the gray market. In many countries, brands may also collect a tax credit for stockpile destruction.
The change at Burberry is a measure of how environmental concerns are shaking up the fashion industry. Younger customers, more aware of these problems, have become the heart of the luxury business. Brands in the sector are abandoning fur, imposing animal welfare standards on their suppliers, and sometimes looking for alternatives to leather. They also tout their recycling and waste reduction policies.
On Thursday, Burberry also said that he would stop using fur in his collections.
Burberry, known for his distinctive plaid pattern and trench coats, has upset his leadership over the past year to revive his fortunes. The brand has long complained that markdowns and poor product placement in US department stores have tarnished its image. More recently, the growth of e-commerce has deprived shopping centers, department stores and other traditional outlets of pedestrian traffic, which has had a negative impact on sales.
In addition to hiring Mr. Gobbetti, Burberry has named Riccardo Tisci, former creative director at Givenchy, as a new designer. His appointment marks a turning point in streetwear-inspired designs that have become essential for high-end brands looking to attract Generation Y buyers.
Write to Matthew Dalton to [email protected]
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