Burberry Investors Question Destruction of $38 Million in Goods
(Bloomberg) -- After designing, manufacturing, marketing and sending their fashions down the runway, the last thing luxury companies want to think about is destroying them. Some Burberry Group Plc shareholders aren’t too happy about the practice, either.
The London-based trench-coat maker physically destroyed finished products worth 28.6 million pounds ($38 million) in 2018, according to the company’s latest annual report. This figure has steadily increased from 26.9 million pounds in 2017 and 18.8 million pounds in 2016.
The disposal of unwanted goods shows that Burberry’s turnaround effort under new Chief Executive Officer Marco Gobbetti and designer Riccardo Tisci remains unfinished business. It’s also a matter of environmental concern to some investors, with one asking during Burberry’s annual meeting this week why shareholders couldn’t be given the chance to buy the items.
John Peace, the outgoing chairman, said destroying stock is “not something we do lightly” and Chief Financial Officer Julie Brown said “we take it extremely seriously.” More cosmetics needed to be destroyed this year as Burberry’s beauty line was acquired by Coty, Brown said. Gobbetti said Burberry has been donating leftover leather to Elvis & Kresse, a fashion company that recycles castoffs into new products, since 2017.
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