Two of the world’s biggest luxury brands may be sitting on unsold merchandise worth 4.7 billion euros (approximately $5.1 billion at current exchange rates). That’s enough to make even the most fashionable among us frown.
what’s happening?
LVMH and Kering, the parent companies of brands such as Louis Vuitton, Gucci and Saint Laurent, saw their unsold inventory more than double between 2014 and 2023, according to La Conseria’s fashion business analysis summary. .
In 2023 alone, LVMH reported 3.2 billion euros ($3.5 billion) of unsold merchandise, while Kering recorded 1.5 billion euros ($1.6 billion). That means lots of handbags and high heels gathering dust.
Why is this excess inventory a concern?
This pile of unsold luxury goods is bad for business and terrible for the planet. The fashion industry already contributes significantly to the overheating of the planet, and overproduction will only exacerbate the problem.
Think about all the resources that go into creating these products: the water to grow the cotton, the energy to manufacture it, the fuel to transport it. If items don’t sell, those resources effectively disappear into thin air.
Additionally, there is an element of waste. In the past, some luxury brands have reportedly destroyed unsold products to protect their image. According to La Conceria, this practice is becoming less common (it is currently banned in France), but finding an environmentally friendly solution to the thousands to millions of unused products is a big deal. It’s a challenge.
Watch now: How did Hurricane Helen cause so much damage inland?
Are luxury brands doing anything about this?
LVMH and Kering are aware of this problem, but a solution is still in development. LVMH said at the time of its report in March that it expected to sell much of its excess inventory in 2024, according to La Conseria.
Meanwhile, across its brands, Kering supports biodiversity by prioritizing waterless dyeing and regenerative farming practices (prioritizing soil health) and, among other things, uses environmentally friendly chemicals such as harmful chemical fertilizers and herbicides. The company said it is working on more sustainable production practices, such as supporting production companies (with the aim of avoiding them). Resource Defense Council explains).
It’s worth noting that luxury brands aren’t the only ones caught up in this struggle. The entire fashion industry is grappling with adjusting supply and demand, especially given the fickle nature of trends, and the fast fashion sector is one of the worst offenders.
Which of the following is the most effective incentive to recycle old clothes and electronics? Give me my money back Let me replace it with something new Make it as easy as possible Keep my stuff out of the landfill Choice Click to see the results and have your say
What is being done about excess stock more broadly?
While the luxury sector is catching up, other areas of the fashion industry are also leading the way in tackling overcapacity. Some brands employ a made-to-order model, producing goods only if a customer makes a purchase. This reduces waste and saves you money in the long run.
Rental and resale platforms are booming, giving new life to beloved luxury items. Extending the life of these products reduces the need for new products.
Innovative recycling technologies are emerging to break down unsold textiles and apparel into new products, creating a more circular economy for fashion.
Join our free newsletter for good news and helpful tips. Also, don’t miss this cool list of easy ways to help yourself while helping the planet.
