Michael GirdleyGirdley Enterprises, Girdley Enterprises, Inc. · Business builder and investor

Why The Fashion Industry Destroys Clothes

Name: Why The Fashion Industry Destroys Clothes
Uploaded: 2024-12-03T13:38:35+00:00
Duration: 57 s
Channel: Michael Girdley
Description: The video explains that major fashion brands such as Burberry, Nike, Gap, H&M, Zara, and luxury watch maker Richemont routinely destroy unsold inventory…

3 Dec 2024 · 1 min

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The video explains that major fashion brands such as Burberry, Nike, Gap, H&M, Zara, and luxury watch maker Richemont routinely destroy unsold inventory. It outlines three primary motives: preserving product exclusivity by limiting supply, preventing gray‑market resale, and exploiting a U.S. customs tax rebate that refunds up to 99% of import duties if the goods are destroyed under official supervision. The speaker notes that this practice is not isolated to Burberry—many brands engage in it—and highlights the broader environmental cost, with the fashion industry generating over 90 million tons of waste annually.

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Burberry just lit $36 million worth of clothes on fire. Here's why. Brand new trench coats, scarves, perfumes. Every year Burberry does a giant purge and destroys a ton of their inventory. And this isn't an accident. There's 3 reasons they're doing it. First, it makes their stuff exclusive. If there's a limited supply, then people will pay more to get their hands on it. Second, it keeps the stuff off of the gray market, which is when resellers get their hands on stock and sell it for cheaper. And then there's the craziest reason. It makes them a ton of money. When companies ship luxury goods in the United States, they have to pay a huge import import tax on every product. But when the products don't sell, they can get 99% of that import tax back as long as a customs official supervises the destruction of the item. By the way, is that the craziest job ever? And it's not just Burberry that destroys their unsold stuff. Nike, Gap, H&M, Zara, they all do it. Fancy watch company Richemont destroyed over $500 million in watches one year. And overproduction in the fashion industry creates over 90 million tons of waste each and every year.