News of the destruction of millions of dollars of high-end merchandise by Burberry and other luxury brands are causing confusion, and in some cases, moral outrage from its customers and admirers. The exposure of the fashion industry practice of destroying new merchandise to protect against market saturation, counterfeiting, and devaluing, is now damaging the very brands that the practice was intended to protect.
Since the early 2000s, Burberry creative leadership has worked to transform the perception of the brand to a more upscale, exclusive, and cutting-edge line that could better compete in the luxury market.
Social media is buzzing with criticism over the destroying of garments that could easily be repurposed in positive, brand building ways. Many have suggested that donating the unused clothing (including many overcoats and accessories) to homeless shelters or other relief organizations could meet an important humanitarian need, while environmentalists are equally angry about the wasteful production.
Defenders of Burberry and the industry practice of destroying excess inventory have argued that such charity would again devalue the brand and merchandise by leaving excess sock susceptible to discounting, while reversing gains made against counterfeiting. Seeing the famous check spread across lower economic communities has not gone well with investors.
Surely, Burberry customers are not that shallow—and even if they were—would avoid embracing a reputation of such self-important elitism. Yet, disdain for the less fortunate is exactly what Burberry is projecting onto its customers (who are actually some of the most philanthropic in our society.) They will be quick to abandon the brand that considers them a snob, and one that tries too hard to be posh.
There are better ways to protect a brand without insulting your customers. Suggestions of removing the labels, dying the clothing, and selling on a secondary market would provide the company cover to its full price paying customers, while addressing the social and economic challenges of others.
Reputational threats and brand risks are the source of nightmares for corporate leaders and marketing professionals. Safeguarding against damage to a brand have led to a communications industry that provides crisis plans, business intelligence, and ideas to better engage customers and promote a brand.
Surely, there were warning signs Burberry and the industry are ignoring. At a minimum, they should be feeling the heat from the fallout from the latest merchandise destruction.
To demonstrate corporate and social responsibility, many companies endeavor to portray, and moreover live, a corporate purpose that is greater than profitability—or at least perceived to be. Burberry decision makers have proven to make the exact opposite decision. Without a proper apology and commitment to change, its brand, like its merchandise, will eventually go up in smoke.