Self Destruction Inventory Of Luxury Goods Is Intended To Protect Brand Value

Since the announcement of the destruction of huge stocks, the British luxury group Burberry (Burberry) has been pushed to the top of the storm by public opinion and the public media.

The company's annual report shows that Burberry has destroyed $37 million worth of clothing, accessories and perfume this year.

This behavior has also caused some shareholders' dissatisfaction.

In April last year, the US cosmetics giant Coty group reached a $160 million perfume and beauty cosmetic business authorization agreement.

The proportion of cosmetic products sold in China is more than that in the past, exceeding 1/3 of the total value.

The total value of goods destroyed in Burberry over the past five years has exceeded US $90 million.

But in fact, this destruction is in luxury.

It is not uncommon in China. The French luxury goods giant LVMH group has said in its latest annual report that it is necessary to destroy surplus stock due to over season or lack of sales potential.

Hermes (Hermes) also said in its annual report that it would destroy seasonal products, but did not disclose the specific number of destruction.

Not only is the dress beautiful, but the Swiss luxury giant Richmont also recognized that over the past two years, in order to prevent the depreciation of commodities, the watches worth more than 400 million pounds have been destroyed.

In response to public criticism, Burberry said in a statement last Thursday that in mass production, the company has always taken corresponding measures to control the total production in order to reduce the waste generated by over production according to the actual situation, and stressed that only if necessary, Burberry will choose to destroy the products and choose the most environmentally friendly way of destruction. At the same time, the company is also actively looking for ways to reduce recycling.

In fact, the reason why luxury goods are to destroy the unfinished products is to protect the value of knowledge products and brands, and not to sell their products at low prices to "grey".

"(by means of the market channel without the authorization of the trademark owner and selling the brand commodity), and then be wrongly worn by the" wrong person ".

In the clothing industry, fast

This is the most serious category of inventory problems. In March this year, H&M was exposed and accumulated 4 billion 300 million US dollars in 2017.

In fact, no matter how to deal with inventory, it is a difficult problem to balance.

Discount and inventory is not necessarily the best choice. H&M is now in the bad cycle because it has been cutting prices to deal with inventory.

Later, it was accused by the Danish media that it would burn up 12 tons of inventory every year.

The practice of direct destruction will obviously put the hat of "weak environmental awareness" on brand image, and Burberry is being criticized.

Although the public will consider moral, humanitarian and environmental protection, choose other ways to deal with surplus goods, such as promotion or donation, but legally, the brand has the right to destroy the rights of the legitimate season goods they produce.

One of the important ways for luxury brands to guarantee their industrial status is to have their own exclusive distribution network and strictly control the circulation of off season goods in the market.

And if there is no way to destroy the incineration, there are other ways for fashion manufacturers, such as Nike's own home.

They were cut and thrown to the garbage dump. The American brand Urban Outfitters ordered employees to splash green paint on their own Tom shoes. Customers returned the Victoria underwear, and the clerk turned around and cut the clothes.

Such a luxury brand is easy to remind people of the fact that "milk is not poured out to the poor".

But over the years, more people have heard that the symbol of "Great Depression" is that the capitalists dumped milk because they wanted to maintain their monopoly profits. However, more and more data showed that milk was originally turned down by dairy farmers, and the purpose of course was to maintain the price of milk, but the practice of dairy farmers was at least unwilling to compensate for the loss of money and send milk to the city for sale.

Therefore, Burberry and other luxury brands are probably the real thing that capitalists will do to burn stock products.