Louis Vuitton offers some of the finest and most expensive bags on the market, but do they destroy ones that they don’t sell?
Louis Vuitton works with a strict business model and any products that go unsold are quite literally burnt to pieces every single year. This is a practice adopted by many luxury brands as it ensures exclusivity, prevents theft, and avoids having to discount any items.
Read on to learn more about Louis Vuitton, how they operate, and exactly why they destroy their products.
Haute Couture
Louis Vuitton is one of the world’s oldest and most successful luxury brands, having been founded in Paris almost two centuries ago. They’re one of the labels that rank extremely high on the scales of luxurious fashion.
As an organization, Louis Vuitton is estimated to be worth almost thirty billion dollars, and its products can be found all around the world. The brand experienced an enormous boom between 2006 and 2012 when it was named the most valuable luxury brand year-on-year.
The success of Louis Vuitton can be attributed to a range of factors, from the high-quality products they produce to the scarcity of the said products. Reportedly, only the finest materials and processes are used to create these products.
It’s well known that Louis Vuitton’s merchandise is extremely expensive and often hard to come by. However, there’s a fanbase out there who is always willing to part ways with their hard-earned (or not) cash to rock the latest Louis Vuitton creation.
Out Of The Frying Pan
Although you might be aware of Louis Vuitton’s popularity among the elite, and its value, you might not know what happens to unsold merchandise. To maintain exclusivity and high prices, Louis Vuitton burns every unsold product, every year.
There are three main reasons for following this practice, and while they make sense, it still seems bizarre to destroy so much merchandise. Firstly, Louis Vuitton avoids sales at any cost – they almost never discount anything and want to ensure that ‘everybody gets their products at the same price’.
Secondly, Louis Vuitton destroys unsold merchandise as a stock control and theft prevention option. If they had a warehouse somewhere full of unsold and legacy stock, it would prevent a lucrative target for would-be fashion thieves.
Finally, Louis Vuitton specifically burns bags in the United States owing to a ‘duty drawback’ law. Allegedly, if something is imported into the United States with duty having been paid, then subsequently destroyed, these duty payments can be reclaimed.
This reportedly enables Louis Vuitton to claim back any financial loss, as the duty on their products is dramatically high. It’s not a total reclaim of the value loss, but it does go some way towards softening the blow.
They’re Not Alone
It isn’t just Louis Vuitton who participates in this practice, as many other luxury brands also replicate the destruction principle. As we’ve explained, there are tangible reasons behind the practice, regardless of how insane it might seem.
For example, it was revealed in 2018 that luxury brand Burberry had destroyed thirty-seven million dollars’ worth of goods in a single year. The leading cause of this drastic action was to ‘stop it falling into the wrong hands’.
These high-end brands need to maintain exclusivity to be categorized as high-end brands. If their products are readily available and sold at discounted prices, they simply lose their value and disappoint their fanbase.
When it comes to labels like Burberry, Louis Vuitton, Prada, and so on, one of their driving sales factors is that they are so exclusive. If you manage to scoop up a brand new product from these lines, it’s considered a substantial achievement, and you’re entitled to flaunt it.
The Controversy
However, just because it happens, it doesn’t mean the world is entirely okay with it. In the first instance, this practice drives consumerism up at an incredible rate, and people become desperate to buy these products before they’re destroyed.
It was revealed in 2019 that the French government was strongly opposed to these destructive practices, and sought to abolish them. France, and more specifically Paris, is the home to many of these luxury brands, and it makes up one of France’s most lucrative industries.
Although, it’s worth debating whether the positives outweigh the negatives. If these products are destroyed in an environmentally friendly manner and the companies float the cost, is it really such a bad thing?