Why brands are burning their excess stock

In the world of fashion, trends change faster than the seasons. To keep up with the ever-evolving demands of consumers, clothing companies often produce large quantities of garments. However, a dirty secret of the industry is the practice of destroying unsold inventory. 

Brands are literally burning or shredding perfectly good unsold products rather than donating, recycling or selling them at a discounted price. Luxury brands have been doing this for years. In July 2018, British luxury brand Burberry admitted in its annual report that ‘demolishing’ goods was just part of its strategy to preserve its reputation of exclusivity. 

It sounds ridiculous, but the practice has become increasingly common for some of the world’s biggest clothing manufacturers. Fast fashion brands such as Nike and H&M, as well as e-commerce giant Amazon, are now facing criticism for destroying excess inventory. 

Why do brands destroy excess stock?

For luxury brands, destroying unsold stock is one of the most cost-effective way to avoid devaluing their image. Luxury fashion is a status symbol, so burning excess inventory – as opposed to selling it at a discount – maintains the brand’s sense of exclusivity.

Another reason is that recycling garments is very difficult. Recycling clothing isn’t like recycling paper, glass or metal. Clothes are endlessly variable and unpredictable. Even a seemingly simple garment may contain multiple materials, with fibre blends such as cotton/polyester and cotton/elastane being common. Current recycling technologies typically require a steady and consistent source material to work well.

Different fibres need to be recycled in different ways. Natural fibres such as wool can be recycled by mechanically shredding or breaking down old wool products into fibre form. These fibres can then be cleaned, processed and spun into new yarn, from which new fabric can be woven or knitted. However, the shredding process produces shorter fibres, resulting in lower-quality yarn and cloth. Recycled cotton is often mixed with virgin cotton to ensure a better quality.

A lot of clothes are also dyed with chemicals and that can have implications for recycling. If the original fabric is a mixture of many colours, the new yarn or fabric will likely require bleaching. 

More complex garments often consist of more than five different materials, as well as various trims including buttons and zippers. To recycle these garments successfully, all components and fibres must be separated. This process is labour-intensive and costly. As a result, it’s often more convenient to shred the garment and transform it into a lower-quality product, such as shoddy, which is commonly used for insulation.

How brands deal with overstock

Burning and shredding are the two main ways that brands get rid of their excess product. Some just simply send it to landfill. Most companies incinerate it so they can claim they are generating energy in the form of heat or electricity through the combustion process. However, the energy that is recouped from burning clothing doesn’t come anywhere near the energy that was used to create the garments.

What do consumers think?

New research by UNSW Business School, conducted in collaboration with Monash Business School, has found people react negatively towards brands that destroy excess inventory. The study, ‘Disposal-based scarcity: How overstock reduction methods influence consumer brand perceptions and evaluations’, shows how the way companies handle excess inventory affects how consumers view them.

The researchers suggest that a brand’s method of dealing with surplus inventory serves as a “marketing signal” that shapes its reputation. However, the methods used can affect people’s opinions and desire to shop for that brand.

“Destroying products is seen as wasteful and damages brand perceptions,” the study says. “In contrast, recycling, donating and discounting methods, which are less destructive and indicate a lack of brand overstock, can enhance brand evaluations. Consumers view these methods more positively.”

Unethical and unsustainable business practices 

With the global backlash against unethical and unsustainable business practices, the research suggests brands have several incentives to improve their forecasting and deal with excess inventory. One solution is to manage inventory levels early on before they become an issue in-store or inside a warehouse. 

“In our investigation, we found that companies don’t usually disclose their method of overstock disposal. We found, though, that perceptions of disposal-based scarcity have far-reaching implications through the flow-on effects of disposal choice,” the study says. “For example, when news or social media covers brands destroying redundant stock, consumers respond very negatively due to their sense of this being a very wasteful act.”

Recycling was a clear winner out of all options open to such brands. “It was known from the literature that people have strong negative reactions to wastefulness, but we had not expected this effect to dominate the other possible effects of overstock disposal methods, including for luxury products,” the study says.

What can you do to help?

Consumers also play a key role in reducing waste in the fashion industry. Here are some key actions you can take to help reduce clothing waste:

  • research the brands you buy 
  • support sustainable and ethical fashion
  • live by the five R’s of fashion: reduce, re-wear, recycle, repair, resell
  • shop second hand where possible, or consider renting for your next event
  • host and attend clothes swaps
  • think about the alternatives before throwing away used clothing.

On a very simple level, figure out which garments bring you the most satisfaction and then buy those things. If you love the clothes in your wardrobe you’ll be more likely to wear them for a long time and not succumb to fast fashion. 

What do you think about brands destroying unsold inventory? Why not share your thoughts in the comments section below?

Also read: Dos and don’ts of affordable fashion

Ellie Baxter
Ellie Baxter
Writer and editor with interests in travel, health, wellbeing and food. Has knowledge of marketing psychology, social media management and is a keen observer and commentator on issues facing older Australians.


  1. I understand the need to protect a brand and the difficulty and cost effectiveness of recycling certain clothing. Destruction means any profit from sales has been lost. The fashion brand could hold the stock in a warehouse then release it at a discount after, say 18 months. They could do it themselves or via a third party. Could be done through brick and mortar oulets or online. Such profit from the fashion houses’ sales would go straight to the bottom line after withholding costs, if any.

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