Watching the rapid change in fashion, the release of new expensive watches and the disappearance of obsolete accessories without a trace, you involuntarily ask the question: what happens to the unsold goods? Maybe they sell it at a reduced price or give it to the poor? Read on to learn about the difficult fate of prestigious items left on the shelves.
Why are trending collections burned?
Expensive brands, which for various reasons have lost their value, are destroyed. This is explained by the marketing policy pursued by 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 product is not intended for charity;
- items put up for sale can be bought by clever dealers who will try to return them to the company store, demanding a refund;
- Companies' own employees can also resort to tricks: write off products and then put them up for sale on the Internet;
- American companies can recover part of their costs in this way: by law, they receive back up to 99% of taxes and duties paid for goods (if the destruction of unsold products was carried out under the control of customs).
Important! Either complete destruction or damage to the goods so much that they cannot be used may apply.
“The fight” with the remnants and its reasons
All manipulations are carried out secretly, in one of the following ways:
- retail chains return the models remaining on the shelves to the manufacturer, and he disposes of 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 a specified period, things are rendered unusable by the employees of the outlet itself.
The main reason leading to overstocking is overproduction, since branded items have prohibitive prices, so only very wealthy people can buy them. In addition, this is affected by:
Short product life cycle. Fashion is fleeting, competition is high, and against this background, obsolete products are replaced sometimes every week.- A separate factor is active fight against corruption in many countries, for example, in China, where it is legally prohibited to give expensive gifts to officials. After this, sales of prestigious brands decreased markedly.
- Manufacturing defects will also serve as a reason for disposal.
- If the buyer does not like the item in any way and returns it to the store, as a rule, it is liquidated.
How did it all start?
Companies usually do not advertise the destruction of their goods.They understand that this will cause a negative reaction from the public. If such facts come to light, then, as a rule, this is a leak of classified information.
It is unknown when and by whom this process was launched. However, most design houses and luxury manufacturers do this regularly.
Which brands are destroying leftover collections?
Well-known companies that have been caught liquidating luxury goods:
Victoria's Secret;- Dior;
- Chanel;
- Versace;
- Nike;
- Burberry (produces fashion accessories, cosmetics and clothing);
- Louis Vuiton (sells expensive bags);
- Richemont (owns the Cartier and Montblanc watch brands);
- H&M (fashionable clothing collections);
- Cavalli (sells a wide range, from various accessories to handbags);
- Celine (design house).
Examples of luxury items that go to waste
About ten years ago, a scandal erupted in New York: in the middle of winter, a student near the store of the Swedish company H&M discovered a heavy package filled with warm clothes. The entire product was completely damaged: chipped and cut. The girl posted photos on the Internet that caused a storm of discussions. The company's reputation was on the brink, after which the manufacturer corrected itself and began sending the illicit goods either for processing or for sale at a reduced price.- Burberry has revealed that it has been burning leftover cosmetics and clothing for several years. This figure reached about $30 million per year. This is a rare case when the facts of liquidation were not hidden.
- The Nike manufacturer was caught damaging a shipment of sneakers in 2017, when passers-by found hundreds of pairs of shredded shoes wrapped in huge packaging near the company store in Manhattan.
- Richemont, a company that sells expensive watches, buys its goods from stores and then destroys them. In 2018 alone, almost $600 million worth of products were disposed of.
- The manufacturer of exclusive handbags Louis Vuiton annually sends the remains of its products to the fire. But an exception was made for its employees, who can participate in closed bidding. There is only one condition: the purchased item is marked and prohibited for resale.
Everything about protecting branded intellectual property
Sellers of prestigious brands are one of the main arguments in favor of liquidating collections call protecting your copyright. They fear the penetration of goods into other, cheaper markets and, as a result, prices will creep down, a stream of skillful counterfeits will pour in, and the status of the brand will collapse against this background.
The idea of intellectual property rights took a long time to develop and took its final form at the Stockholm Conference in 1967. Her decision stated that the author has exclusive rights to his invention, and the state must provide him with protection, including from unscrupulous competitors.
In this matter, the copyright holders of prestigious products do not have any advantages or differences - their officially registered marks are completely protected from any attacks. Only their owner decides how to dispose of the collections produced.
Is the destruction of luxury goods barbaric or necessary, let the reader decide for himself. However, it is clear that this process will continue, since such actions do not violate the law. Protests from shareholders and environmentalists do not change the situation. Companies can handle the manufactured product at their discretion.In rare cases, widespread publicity and public censure may force a firm to change its policy.
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