We all love seasonal changes in fashion, and those annual clearance events sure can be exciting! Those with a sharp eye may notice that not all brands seem to have the same kind of sales, and questions arise about what happens to it all on a yearly basis. How much of what we see on the shelves actually gets sold?
The shocking truth is, billions of dollars of merchandise is burned at the end of the cycle. Yes, literally burned! This may seem almost sinful, but it’s a common practice these days. So why has this become the norm at all? Let’s find out what’s really going on behind the scenes in the fashion industry, shall we?
Two particularly bad offenders appear to be H&M and Burberry. Perhaps they do so for different reasons, as we will see. In 2017, H&M actually set fire to 15 tons of unbought items, an estimated value of $4.3 billion! The only consolation here for horrified fashionistas might be the fact that the fumes powered a town in Sweden. Burberry burned $36.8 million of its merchandise, with no energy benefit. A power plant using clothing is pretty novel, but many may wonder why this was even necessary! Sad times. What’s really going on here?
Second Hand Ban
Some may wonder why the clothing cannot simply be donated to countries with poorer populations. A legitimate question! And perhaps that used to be a common practice. But surprisingly, some developing nations have actually passed laws to limit the import of clothing from the West. Why? Essentially, they are developing. Many nations want a chance to allow their local merchants to sell and grow, and massive tons of free H&M clothing would clearly undercut this business. There are two sides to that coin, but this still means the excess at our malls is going straight to the furnace. Oh no!
Excess and Access
Alright, it’s not possible to literally give it away abroad. But what about local sample sales? Those seem to be pretty popular every time they are tried. Alas, the sheer amount of fashion excess means that the constant sample sales would create problems in a luxury industry for a company like Burberry. Because they have been selling items for thousands of dollars, the idea that their merchandise is actually regularly available for half or less would indicate a serious problem to consumers. Mainly, that they have been paying too much!
The Bottom Line
Yes, that’s right. It is actually more profitable for a luxury company to sell high and maintain their exclusivity illusion by incinerating the excess instead of selling things on their clearance racks! Incredibly, they are still profitable with this practice, and highly so. Some may wonder why it isn’t simply sold to TJ Maxx at the end of the season. Same problem, really. If Burberry is seen as a discount store brand, this will undercut the sales on the luxury end of consumer interest. Concerned shoppers can start to think about the scale of this problem, but it is not clear that this practice is slowing down anytime soon. Any bright ideas to offset the waste? Perhaps H&M is as confused as you are!