Today's BBC news showcases a perfect example of why we do business the way we do.
It was revealed that Burberry burned millions of dollars worth of unsold bags, clothes and even perfumes to prevent them from ending up being heavily discounted and possibly harming their brand image. How could this possibly happen?
Clearly Burberry incorrectly estimated the demand for their products. They just produced too much and their customers weren't having it.
This mistake happens all the time with fashion brands, and the result is usually heavy discounts, sales, and even selling off the unwanted stock for pennies on the dollar to third world countries. Worse yet, often this unsold stock is just dumped in landfill.
But for luxury brands that isn't good enough... they burn the products, turning a business miscalculation into an environmental disaster.
It's not just Burberry... Versace to Gucci to Hermes, it's become common practice among luxury fashion brands. They are fearful that having their products available with deep discounts will reduce the value of the brand in the eyes of luxury shoppers. Shame on them. The worse outcome should be that they harm the environment simply to protect their bottom line.
At Nixxle, we only make items the moment that our customers order them. We do this because not only does it allow us to eliminate the problem of unsold / unwanted inventory, it also allows our customers to get handmade pieces that are made just for them.
From the BBC
"The reason they are doing this is so that the market is not flooded with discounts. They don't want Burberry products to get into the hands of anyone who can sell them at a discount and devalue the brand," Ms Malone said.
Environmental campaigners are angry about the waste.
"Despite their high prices, Burberry shows no respect for their own products and the hard work and natural resources that are used to made them," said Lu Yen Roloff of Greenpeace.
"The growing amount of overstock points to overproduction, and instead of slowing down their production, they incinerate perfectly good clothes and products.
"It's a dirty secret of the fashion industry. Burberry is just the tip of the iceberg," she said.
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