Watching the rapid change of fashion, the release of new expensive watches and the traceless disappearance of obsolete accessories, one involuntarily asks the question: what happens to unsold goods? Maybe they sell it at a reduced price or give it to the poor? Read about the difficult fate of the prestigious things that are on the shelves.
Why are trend collections burned?
Costly brands that, for various reasons, have lost their value, are being destroyed. This is due to the marketing policies of the manufacturer. The initiators of this barbaric (from the point of view of society) procedure cite the following reasons:
fear of losing the high status of their products, since they should remain available only to a narrow circle of consumers;
- on the same basis, the goods are not intended for charity;
- items put up for sale can be bought by dexterous dealers who will try to return them to the company store, demanding a refund;
- own employees of companies can also resort to tricks: write off products and then put them up for sale on the Internet;
- In this way, American companies can recover part of the costs: according to the law, they will be refunded up to 99% of the tax amounts and duties paid for the goods (if the destruction of unsold products took place under customs control).
Important! Either total destruction or damage to the goods so that they could not be used can be applied.
"Fighting" with the remnants and its causes
All manipulations are carried out secretly, in one of the ways:
- retail chains return the models remaining on the shelves to the manufacturer, and he utilizes the products on his own, compensating the counterparty for their full cost;
- An agreement is drawn up between the store and the company, according to which, after the agreed period, things are put into disrepair by the employees of the outlet itself.
The main reason leading to overstocking is overproduction, since branded items have an exorbitant cost, so only very wealthy people can buy them. In addition, this is affected by:
Short product life cycle. Fashion is fleeting, the competition is high, and against this background, the change of obsolete products happens sometimes every week.
- A separate factor is the active fight against corruption in many states, for example, in China, where the law forbade officials to give expensive gifts . After this, sales of prestigious brands declined markedly.
- A manufacturing defect will also serve as a reason for disposal.
- If the buyer doesn’t like the thing, and he returns it to the store, as a rule, it will be liquidated.
How did it all start?
Firms usually do not advertise the destruction of their goods. They understand that this will cause a negative reaction from the public. If such facts emerge, then, as a rule, this is a leak of classified information.
When and by whom this process was launched is unknown. However, most designer houses and luxury manufacturers regularly do this.
Which brands destroy the remains of collections?
Well-known companies that have been convicted of the elimination of luxury goods:
- Burberry (produces fashion accessories, cosmetics and clothing);
- Louis Vuiton (sells expensive bags);
- Richemont (owns the watch brands Cartier and Montblanc);
- H&M (fashion collections of clothes);
- Cavalli (sells a wide range, from various accessories to handbags);
- Celine (designer house).
Examples of luxury things that go "for scrap"
About ten years ago, a scandal erupted in New York: in the middle of winter, a student near a store of the Swedish company H&M found a heavy package full of warm clothes. All the goods were completely spoiled: chopped and chopped. The girl posted photos on the Internet that caused a storm of discussion. The company's reputation was on the verge, after which the manufacturer was corrected and began to send illiquid assets either for processing or for sale at a lower price.
- Burberry has revealed that it has burned leftover cosmetics and clothing for several years. In a year, this figure reached about $ 30 million. This is a rare case when the facts of liquidation were not hidden.
- Nike was hit by a shipment of sneakers in 2017 when, next to a Manhattan company store, passersby found hundreds of pairs of rugged shoes wrapped in huge packaging.
- Richemont, a company that sells expensive watches, buys its goods from stores and then destroys them. In 2018 alone, nearly $ 600 million worth of products were recycled.
- The manufacturer of exclusive Louis Vuiton handbags annually sends the remnants of their products into the fire. But an exception was made for their employees who may participate in closed tenders. There is only one condition: the acquired item is marked and prohibited for resale.
All About Brand Intellectual Property Protection
The idea of the right to intellectual property was formed for a long time and took its final form at the Stockholm Conference of 1967. In her decision, it was pointed out that the author has exclusive rights to his invention, and the state should provide him with protection, including from unfair competitors.
In this regard, the owners of prestigious products do not have any advantages and differences - their officially registered marks are fully protected by any encroachment. How to dispose of the collections made, only their owner decides.
Destroying luxury goods is barbarism or necessity, let the reader decide for himself. However, it is clear that this process will continue, since such actions do not violate the law. Protests by shareholders and environmentalists do not change the situation. Companies may handle the manufactured product at their discretion. In rare cases, widespread publicity and censure can force a firm to change policies.