Why Luxury Brands Destroy Millions in Unsold Goods

In the world of high fashion, there's a dirty little secret that makes accountants weep and environmentalists rage: luxury brands have been destroying billions of dollars worth of perfectly good merchandise rather than letting it sell for less than full price.

LVMH, the parent company of Louis Vuitton, has historically been among the brands that would rather see their unsold goods go up in flames than appear on a discount rack.

The Logic Behind the Burn

It sounds insane, but there's cold business logic at play. Luxury brands sell more than leather and thread—they sell exclusivity. The moment a Louis Vuitton bag shows up at a discount outlet or gets resold cheaply online, the mystique takes a hit.

Why would anyone pay $3,000 for a bag they might find for $800 somewhere else? The entire pricing structure depends on scarcity and prestige. Destroying unsold inventory protects both.

The Scale Is Staggering

This isn't just a few damaged items getting tossed. Reports have revealed that major fashion houses destroyed merchandise worth:

• Burberry infamously burned over $37 million worth of goods in a single year
• H&M was found to have destroyed 12 tons of unsold clothing annually
• Richemont (owner of Cartier) bought back and destroyed over $500 million in watches over two years

The luxury goods that get incinerated include not just bags, but clothing, shoes, perfume, and jewelry.

The Backlash Is Building

Public outrage has started forcing change. France passed a law in 2020 banning the destruction of unsold goods, requiring companies to donate or recycle instead. Other European countries are following suit.

Some brands are adapting. Burberry ended its burning practice after the PR nightmare. Others have launched "circular" programs to refurbish and resell items. LVMH has committed to reducing waste, though details remain vague.

Why Not Just Make Less?

Here's the uncomfortable truth: overproduction is baked into the business model. Fashion brands deliberately produce more than they expect to sell because:

• Running out of stock looks worse than having leftovers
• Manufacturing costs drop with larger orders
• Predicting demand is genuinely difficult

The alternative—producing less and risking empty shelves—feels riskier than quietly destroying the excess.

So next time you see a luxury boutique with its gleaming displays and immaculate inventory, remember: somewhere, a furnace is keeping that illusion alive. Though hopefully, not for much longer.