Burberry’s report spotlights global fashion’s burning issue

British brand incinerated unsold stock worth £29 million

On guard: Brands burn excess stock to keep it off the grey market.

Burberry is taking the heat for fashion’s chronic waste problem. The British brand has drawn criticism after admitting it incinerated unsold stock worth £29 million last year. It’s just the most visible participant in an industry practice that rivals are loath to discuss.

Every year the maker of trench coats that cost £1,500 discloses in its annual report how much unsold stock it destroyed. The figure ticked up slightly in the 12 months to March 2018 after a new contract with Coty left Burberry with excess cosmetic products.

Problem of waste

But waste is clearly a growing problem.

The brand destroyed just £1.6 million of stock 10 years ago; since then almost £130 million of unwanted inventory has gone up in smoke.

At least Burberry is transparent about the number. Rival luxury names LVMH and Kering do not discuss what they destroy, despite making lots of noise about sustainability.

However, it is common practice to burn excess stock to keep it out of the so-called grey market, where products sold at a discount by unauthorised merchants can damage a brand’s image and undermine its pricing power.

The global clothing industry has an even bigger problem. Production doubled between 2000 and 2015, helped by the rise of fast-fashion retailers like H&M and Primark, which churn out huge volumes of cheap garments.

Over the same period, the average number of times a piece of clothing is worn before it is thrown away has dropped by over a third, data from the Ellen MacArthur Foundation shows.

The result is that more garments are wasted during production — around 12% of the total — and more end up in landfills and incinerators. Luxurious or not, fashion brands should brace for more overdue scrutiny of their wasteful ways.

( The author is a Reuters Breakingviews columnist. The opinions expressed are her own )