Why Do Luxury Brands Destroy Their Own Products Instead of Selling Them at a Discount?
A bag that costs more than a used car gets put in an incinerator because nobody bought it. And the brand picked that over a clearance sale. That sounds unhinged until you understand what luxury brands are actually selling. Then it starts to look like a very expensive, very weird form of logic.
What happened
In 2018, news broke that Burberry had destroyed about £28 million worth of unsold clothing, accessories, and perfume in a single year. The public reaction was basically: wait, they’re burning it? Around the same time, reports showed Richemont, the group behind Cartier, had bought back and destroyed hundreds of millions in unsold watches rather than let them sit on the market at lower prices.
Burberry apologized and promised to stop. But the question stuck around, because the practice wasn’t a one-off scandal. It was a business decision that a lot of people in the industry had been quietly making for years.
What a luxury brand is really selling
Here’s the part that clicked for me. A $3,000 handbag isn’t 30 times better than a $100 one in any measurable way. Nobody’s paying for the leather.
They’re paying for scarcity and status. The bag says something about the person carrying it, and that message only works if not everyone can have one. The moment a brand starts discounting, the signal weakens. If you can grab the “exclusive” coat at 60% off in an outlet, it stops being exclusive. And the people who paid full price feel a bit silly.
So for these brands, a sale isn’t just lost revenue on one item. It’s a threat to the thing that justifies every other price tag.
So why not just donate it?
Great question, and it’s the one people reasonably ask next. There are a few reasons brands give:
Brand control. Donated or resold luxury goods can end up in markets where the brand doesn’t want to be seen, or get sold on cheaply, which brings the discount problem right back. Counterfeits and grey markets. Leftover stock can be pulled apart, relabeled, or used to make fakes look more convincing. Tax and accounting. In some places, destroying inventory can be a simpler write-off than the complicated route of giving it away. Plain old inertia. Honestly, a lot of it is “this is how it’s always been done.”
Do these explanations hold up? Some more than others. Critics point out that brands could cut up or remove the labels, or recycle materials, and still protect their image. Which leads to the actual problem.
*The waste
Fashion already has a serious waste problem. Making clothes takes huge amounts of water, energy, and raw materials, and destroying finished goods means all of that was spent for nothing. When it happens at scale, it’s hard to defend as anything but wasteful, especially while many people can barely afford basics.
It also exposes something uncomfortable about overproduction. Brands make more than they sell because they’d rather risk having too much than risk running out and looking less desirable. The destruction is the end of a chain that started with making too many things on purpose.
Where policy comes in
This is where it becomes a social policy story and not just a fashion gossip one. Governments have started stepping in. France passed a law that bans destroying many unsold non-food goods, pushing companies toward donation, reuse, or recycling instead. The European Union has been moving the same way, with rules aimed at stopping large companies from destroying unsold clothing and footwear, which began taking effect this year.
The idea is simple: if the law says you can’t burn it, you have to find another answer. That might mean making less to begin with, which is the outcome policymakers actually want.
Is a ban the right fix?
Reasonable people disagree here, and I don’t think it’s a slam dunk either way.
Supporters say it’s a clear, enforceable rule that forces better habits and protects the environment. Skeptics worry that brands will just find workarounds, like shipping stock elsewhere or quietly shredding it under another label, or that smaller businesses could get stuck with compliance costs the giants can easily absorb. And there’s a deeper question nobody’s fully solved: if luxury only works because it’s scarce, can you really regulate a business model that depends on exclusivity?
Conclusion
What I keep coming back to is how much of the price we pay isn’t about the product at all. It’s about a story. The story only holds together if the company controls how many items exist and who gets them, and apparently some brands will destroy real, perfectly good things to protect it.
You don’t have to care about designer handbags to find that interesting. It’s a pretty clear look at how value gets manufactured, and at what happens when the rules finally say, okay, that’s enough.
So maybe the better question isn’t why brands destroy their products. It’s why we’ve built a system where that ever made sense.