Burberry (LON:BRBY) has destroyed more than £28 million of unwanted products over the past year, equivalent of more than 20,000 of its signature trench coats, The Times has reported. Insiders have told the newspaper that luxury brands destroy unwanted products to protect their intellectual property and brand values.
Burberry’s share price has fallen into the red in today’s session, having given up 0.55 percent to 2,155.00p as of 14:39 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.23 percent higher at 7,694.01 points.
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Burberry burns £28m worth of products
The Times reported this morning that Burberry has destroyed more than £28 million of unwanted products over the past year, while the value of its waste has gone up 50 percent in two years and almost six times greater than in 2013. More than £90 million of Burberry products have been destroyed over the past five years.
The newspaper noted that the luxury goods retailer’s shareholders are unhappy with the trend, with one having asked at the group’s annual general meeting last week why the unsold products were not offered to the company’s private investors.
Burberry explained it took the issue of waste ‘extremely seriously’ and that more cosmetics than usual needed to be destroyed this year with its beauty line having been bought by the American company Coty. The FTSE 100 group also pointed out that the practice was common across the retail industry, The Times reports.
Analysts on blue-chip luxury goods retailer
Societe Generale, which sees Burberry as a ‘buy,’ boosted its price target on the shares from 1,920p to 2,500p yesterday. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 1,843.65p.
As of 14:59 BST, Thursday, 19 July, Burberry Group plc share price is 2,149.00p.