In 2004, Burberry faced a huge challenge as its signature collection of garments was being widely imitated by cheap, mock brands, making luxury consumers feel that their luxurious clothing was similar to what working class youngsters were wearing. Burberry had witnessed a growing trend of ‘chavs’ wearing its trademark camel check clothing. Retailers who stocked Burberry merchandise felt that there was a rising negative association with the brand among people of high social status...

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DESTROYING EXCESS STOCK

According to experts, destroying unsold stock was a technique commonly used by luxury houses to maintain a shortage of their goods and the uniqueness of their brands. In Italy and many other countries, these companies could also claim a tax credit for destroying inventory. Luxury brands like Chanel S.A and Louis Vuitton Malletier too had resorted to the practice...

REACTIONS

Many analysts, environmentalists, and customers criticized Burberry for destroying the products instead of placing them on sale or giving them to a charitable cause. Sass Brown, dean of Dubai Institute of Design and Innovation, said, “The fact that Burberry destroys stock is not a surprising revelation for those with knowledge of the industry. This has been a long-time practice to ensure the exclusivity of product. Unfortunately, big brands like Burberry are locked into a broken system, part of which is financial. As a publicly traded company, it is expected to show continuous growth on a quarterly basis. But how can a brand show constant and consistent growth on a finite planet, despite financial downturns, material scarcity, changing weather patterns and a host of other market realities?” ..

BURBERRY CALLS OFF STOCK BURNING

On September 6, 2018, Burberry announced that it would stop the exercise of burning unsold goods, with immediate effect. It also said it would stop using real fur in its products, and would remove existing fur items. Burberry had been using rabbit, fox, mink, and Asiatic racoon fur in its collections, but it pledged to stop using them in the future...

THE ROAD AHEAD

After the stock burning fiasco, Burberry initiated different programs to project the image of an ethical company and took several steps for the purpose. Burberry said it was working with the sustainable luxury company Elvis & Kresse to renovate 120 tonnes of leather offcuts into new products by 2024. It planned to increase efforts to reuse, repair, donate, or recycle its products and work to cultivate new sustainable resources...

EXHIBITS

Exhibit I:Burberry Time Line
Exhibit II: Key Financials of Burberry Group PLC
Exhibit III: An Open Letter to Burberry by threadUP