Tag Archives: fashion supply chain

Burberry Under Fire Following Reveal of Mass Product Burn

In the past five years luxury retail brand Burberry has burned more than £90m worth of stock. What’s the justification?

Sorbis / Shutterstock.com

British fashion giant Burberry hit the headlines this week as it was revealed, in its 2017/2018 annual report, that it has set fire to over £28 million worth of products.

According to the BBC, this takes the total value of goods Burberry has destroyed over the past five years to more than £90m.

Several commentators have explained this procedure as common practice in the fashion industry; used as a measure to protect  intellectual property and to prevent products being stolen, replicated and sold on for a fraction of the market price. Destroying stock also ensures it will not worn by what the brand believes to be the “wrong” sort of people.

Indeed, Burberry is far from being a singular culprit in the fashion industry when it comes to destroying excess stock. In 2017, The New York Times carried out an exposé on Nike, which revealed it was deliberately destroying stock by slashing large rips through its shoes.

According to the New Statesman, luxury brands are all at it – “the owners of Cartier and Montblanc destroyed more than £400m worth of watches in two years after buying back unwanted stock from jewellers.”

Burberry’s spokesperson said “Burberry has careful processes in place to minimise the amount of excess stock we produce.  On the occasions when disposal of products is necessary, we do so in a responsible manner and we continue to seek ways to reduce and revalue our waste.

“This is a core part of our Responsibility strategy to 2022 and we have forged partnerships and committed support to innovative organizations to help reach this goal.

“One example is our partnership with the Ellen MacArthur Foundation’s Make Fashion Circular Initiative, where we join other leading organisations to work towards a circular fashion economy.”

What the critics say

The news has sparked a great deal of controversy in the media with critics describing the practice as elitist, wasteful and unethical.

Kirsten Brodde, who leads the Detox My Fashion campaign at Greenpeace, spoke to The Guardian arguing that Burberry  “shows no respect for its own products and the hard work and natural resources that are used to make them”.

“To learn that a major fashion house with power and authority is choosing to add even more retail waste to the billions of tonnes offloaded to landfills and oceans around the world every year is reckless and arrogant” said Niamh Odonoghue for Image.

“The stuff that Burberry is burning is not waste – it is surplus, which is a very different concept. It is perfectly useable stuff,” said Orsola de Castro, co-founder of Fashion Revolution, a not-for-profit group that campaigns for greater transparency in the supply chain, speaking to the Independent. 

“Designer fashion is still, undoubtedly, all about class – or, rather, about staying away from anyone not part of the elite,” said Billie Esplen for the News Statesman

In a world where there is increasing pressure for big brands to lead the charge on ethical and sustainable business, is Burberry’s behaviour completely unacceptable? Will the outrage sparked by this news story encourage luxury fashion brands to reconsider their approach to managing surplus stock? Let us know your thoughts in the comments section below.

In other procurement news this week…

Lidl revealed as worst supermarket for recyclable plastic 

  • Less than three-quarters of the food retailer’s plastic packaging is widely recyclable, found a Which? investigation that surveyed 27 popular own-brand groceries from the UK’s 10 biggest supermarkets
  • Lidl came bottom of the pile with 71 per cent of its packaging widely recyclable, Morrisons emerged as the frontrunner with 81 per cent
  • All the supermarkets surveyed by Which? signed up to the UK Plastic Past in April, which vowed to make all plastic packaging reusable, compostable or recyclable

Read more on Supply Management 

Rising trade costs could pose a ‘dairy dilemma’

  • Even if the government strikes a trade deal with the EU, impacts on the supply chain, such as non-tariff trade barriers and labour shortages, could lead to spiralling costs for dairy companies, a report by the London School of Economics
  • The report, commissioned by Arla, said longer waiting times for customs inspections at the border would increase trading costs because of longer hours for lorry drivers
  • The report warned of extra delays because the UK Customs Declarations Service would have to deal with 250m declarations per year after Brexit, 100m more than the 150m it was designed to handle, which could further compound the £111 figure

Read more on Supply Management 

Adidas pledges to go green by 2024 

  • Adidas will only be using recycled plastics for all their products beginning in 2024. Earlier this week, the Financial Times reported the move that will feature the company removing new plastics from their athletic wear, which includes polyester
  • Polyester is currently found in 50 percent of Adidas’ products, which has become a popular material to create athletic wear with
  • This is the latest sustainable move by Adidas, who has sold one million shoes that were made with recycled plastic from the oceans

Read more on Green Matters

Fast Fashion, The Supply Chain and The True Cost

Fast fashion helps sate deeply held desires among young consumers in the industrialised world for luxury fashion, even if it embodies unsustainability.

Trends run their course at high speed, with today’s latest styles swiftly trumping yesterday’s, which have already been consigned to the waste bin. Fast fashion has allowed for the constant supply of fashion trends, captured straight from the catwalk, at a cheap price.

What is ‘The True Cost’ of Fast Fashion?

The True Cost movie is a 2015 documentary that focuses on fast fashion and the supply chain. The documentary discusses several aspects of the garment industry from production – exploring the life of low wage workers in developing countries – to its after-effects of river and soil pollution, pesticide contamination, disease and death.

The True Cost is a collage of interviews with environmentalists, garment workers, factory owners, and fair trade companies and organisations, promoting sustainable clothing production.

Lucy Siegle is an author, journalist and Executive Producer of The True Cost. Her research into the fashion supply chain lifted the lid on the pollution and blind exploitation, inspiring her book To Die For. The deeper she dived into the fashion supply chain, the bigger the story became.

In an interview for The True Cost, Siegle comments that the most surprising thing she discovered was how quickly a sustainable system can be undone and destroyed forever. She had discovered that most western buyers were using completely nonsensical calculations when they placed orders in first tier factories.

This meant that factories could not possibly complete the enormous orders that had been placed, and would turn to outsourcing. This was where sweatshop labour became the reality.

“I realised there were a number of flashpoints in the supply chain that were adding up to extreme exploitation and possible catastrophe and that this was a standard business model.”

Garment manufacturing is estimated to be a $3 trillion industry. Yet factory workers are subjected to poor working conditions, low salaries and minimal to no rights. The True Cost documents the events of the 2013 Savar Building, or Rana Plaza, disaster, when an eight-story commercial building collapsed, killing over 1,000 people.

The event sparked the investigation into fast fashion on a global scale.

The Supply Chain and Fast Fashion

There is pressure on the supply chain to manufacture garments quickly and inexpensively, allowing the mainstream consumer to buy current clothing styles at a lower price.

fast fashion and the supply chain

Fast fashion very quickly became disposable fashion, due to the relatively low costs needed to deliver designer products to the mass market. The consequences of the trend became noticeable through increased pollution from manufacturing of the clothes and the decay of synthetic fabric, poor workmanship, and the emphasis on brief trends rather than classic pieces.

Recently, Australian surfwear brands have been urged to publish a list of every factory used in their supply chain. This follows an investigation that revealed some garments being made for the Rip Curl brand had been manufactured in North Korea, where factory workers endured slave-like conditions.

Rip Curl claimed to have no knowledge of their garments being produced in North Korea, as the clothes were shipped to retail outlets and sold with a “made in China” logo on them.

Rip Curl blamed one of its subcontractors for the practice, stating this was a case of a supplier diverting part of their production order to an unauthorised subcontractor and country. This was done without their knowledge or consent, and in clear breach of supplier terms and policies.

Rip Curl and North Korea

After the 2013 Rana Plaza collapse in Dhaka, Bangladesh, Australian firms’ garment-sourcing policies came under intense scrutiny. More than 90 per cent of garments sold in Australia are estimated to be sourced from Asia, while a huge proportionate of Asian garment workers are women who are paid minimal or poverty wages.

The event promoted a number of global brands to speak openly about their CSR efforts. Lucy Siegle comments that Public Relations efforts around company CSR efforts are getting more sophisticated. However, in many case, the business models stay the same. This is a concern when the business model is based on furious expansion, and companies are investing in pilot schemes in new low-wage fashion production hubs.

The fast-changing and glamorous image of the fashion industry presented to consumers is the very aspect which poses significant challenges for supply chain professionals. Companies are increasingly opting for a similar supply chain network, allowing them to easily and quickly replenish and rotate stock, and align with local market trends.

Sourcing location is one of the biggest challenges posed in the fashion industry. Sourcing from further afield can bring lower costs, but results in visibility and traceability challenges. Sourcing close to key markets guarantees a fast response, but has much higher costs and capacity constraints.

Lucy Siegle and Big Ideas Summit 2016

Lucy Siegle - True Cost

Lucy Siegle is a key note speaker at the Big Ideas Summit 2016 powered by Procurious. She will be sharing her thoughts and experiences on the ethical supply chain and the true cost of doing business in the fashion industry and a number of other industries.

Want to know more about Big Ideas 2016? Then visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.