Why do some luxury brands destroy unsold merchandise?

Published October 12, 2021, 4:17 PM

by John Legaspi

Destroying unsold products contributes to pollution by putting valuable resources to waste

Photo from Unsplash

One of the many secrets inside the fashion industry’s closet concerns how it eradicates its unsold products. From burning to simply slash their products are among the practices luxury labels are taking in order to get rid of these “unwanted merch.” Now, in our time when everyone is demanding sustainability and circularity, destroying unsold merchandise is a thing of the past until one Tiktok user shared a bunch of damaged luxury items found in a waste bin outside of a Dallas mall in the US on Aug. 31, 2021.

Anna Sacks, known as Traskwalker online, presented through video tore down shoes and bags from the American brand Coach. This practice of “damaging goods raises the costs of the goods sold for retailers, which in turn results in a lower gross profit. In short, damaged inventory reduces a tax bill,” per Diet Prada.

“This is what they do with unwanted merchandise. They order an employee to deliberately slash it so no one can use it. And then they write it off as a tax write-off under the same tax loophole as if it were accidentally destroyed,” she said in the now-viral post.

To address the issue, the luxury label released a statement on its social media accounts saying that it has “always strive to do better and we are committed to leading with purpose and embracing our responsibility as a global fashion brand to effect real and lasting change for our industry.”

In the same post, Coach also said that it has “ceased destroying in-store returns of damaged and unsalable goods and are dedicated to maximizing such products reuse” through “Coach (Re)loved and other circularity programs.”

In a 2018 report by Vox, Timo Rissanen associate professor of Fashion Design and Sustainability at Parsons School of Design, shared a theory on why extra merch is being destroyed is because “they see discounts and donating as a way to devalue their brand.” Another reason brands are taking this step before is because of fast fashion. 

“Fashion cycles have also gotten shorter because of the internet and fast fashion, so there’s a push to constantly put new merchandise out on the market,” he said. “So when you combine these two, we are now literally at a place where we no longer have anywhere for this stuff to go other than up a chimney.”

Ruining unwanted products also proposed negative effects on the environment. According to Fashion Revolution Philippines, garment production is predicted to grow by 81 percent by 2030, making more demands for agricultural materials such as cotton, viscose, wool, rubber, leather hides, and other natural fibers. Destroying unsold products contributes to pollution by putting valuable resources to waste.

“The past year has shown us more vividly than ever before that the health of our world is the health of its people. The COVID-19 pandemic is a direct consequence of human impact on the natural world,” Fashion Revolution Philippines’ country coordinator Theresa Arigo said in a previous story by Manila Bulletin Lifestyle.

“New research is also helping us understand how chemicals and microfibers present in our clothing are now prevalent in every part of the earth, the oceans, and within our human bodies. This makes fashion and textiles the largest source of microplastic pollution,” she continued. “Some of the most severe and exploitative working conditions and worst environmental damage happens deep within the fashion supply chains. It is where materials are grown and fabrics are made, as evidenced by recent revelations of forced labor of Uighurs in the Xinjiang region of China. The time has come to demand a deeper level of transparency from the fashion industry.”

 
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