In 2018, Burberry disclosed destroying £28.6 million of unsold clothing, perfume and accessories; the company said the practice helped protect brand exclusivity

In 2018, Burberry disclosed in its annual report that it had physically destroyed £28.6 million worth of unsold clothing, perfume, and accessories over the previous financial year, a routine practice in luxury retail that became a public controversy as soon as the figure came to light. The disclosure, buried in a lengthy annual filing, drew immediate scrutiny from the media, shareholders and lawmakers, and the company announced in September 2018 that it would stop destroying unsold merchandise except as a last resort.The £28.6 million figure covered the year ending March 31, 2018Burberry's annual report stated that the cost of finished goods physically destroyed that year came to £28.6 million, a figure later cited directly in a UK House of Commons Environmental Audit Committee report examining sustainability across the fashion industry. This was an increase from £26.9 million in the previous year, according to Burberry’s 2017/18 annual report. Among the products destroyed were clothes, accessories and perfume that had not been sold through regular distribution channels. The company chose to burn off the products instead of selling them at a reduced price or donating them away. This, as stated by the company, helped them capture the energy that was released during the process.The company said the goal was protecting brand exclusivity, not simply managing wasteAccording to Burberry, the new policy was designed to prevent any surplus from entering the grey market. The grey market is characterized by discount items that may erode a brand’s premium positioning. By selling the surplus goods at a discount, Burberry said that it could diminish the value of its brand as well as create an opportunity for counterfeiters, because counterfeit products may benefit from discounted goods for legitimacy. The justification provided by Burberry was not uncommon within the fashion retail industry. The committee noted that the Burberry stock-burning case had drawn attention to wider concerns about how fashion companies handled unsold goods.Shareholder and lawmaker scrutiny followed almost immediatelyThe Fixing Fashion report said that “the fashion industry has marked its own homework for too long” and called for stronger government action, including mandatory due diligence and measures to make retailers take greater responsibility for textile waste. The Fixing Fashion report itself cites data showing only 55% of the 150 brands and retailers surveyed by Fashion Revolution's 2018 Transparency Index were publishing measurable, time-bound environmental goals, with just 6% offering repair services. Advocacy groups added to the pressure. The parliamentary committee's findings highlighted the wider problem of unsold stock and called for stronger government action on textile waste.Burberry reversed the policy by September 2018As per a statement issued by Burberry in September 2018, the company stated that in future, Burberry will stop the practice of destroying unsold merchandise and will opt for reusing, repairing, donating, or recycling unsold products as far as possible, destroying them only as a last resort when products are defective, damaged, or obsolete, a carve-out critics noted could still cover much of the unsold seasonal stock the original practice was meant to address. However, legislators in the committee report acknowledged the commitment but claimed that other firms in the industry had failed to do so. In that same September 2018 statement, Burberry separately announced, as an unrelated policy shift, that it would stop using real fur in its products.A recommendation made by the Environmental Audit Committee in their Fixing Fashion report of February 2019 suggested that the British government should stop the practice of burning and burying unsold stocks of clothes that can be recycled and reused. The recommendations did not become laws, but the findings of the committee were largely based on the attention that was garnered by Burberry's disclosure and it was used as an exemplary case where voluntary commitments alone were perceived as insufficient. It was hard to tell whether other British firms were disposing of as many items as Burberry, yet most companies give very little information on the issue as compared to Burberry in their annual reports.Catch the latest World News and Live updates. Download the TOI app.