Louis Vuitton, Chanel, Burberry, Bottega Veneta are some of the topmost luxury brands which are very heavily priced and their bags, shoes and accessories are super expensive. It might take us some years to save the money to buy one of these ultra-luxurious bags. But did you know that every year, Louis Vuitton burns all its unsold bags?
It is difficult to believe, isn’t it?
The news comes as a rude shock to anyone who hears it first. Why can’t LV find another use for their iconic bags at the end of the year? Why can they not be auctioned for charity or customised individually so as to raise a better price, or just generally recycled?
Well, apparently, LV doesn’t want to put their bags on a lower price. According to OMG Facts, Louis Vuitton burns their leftover merchandise in order to maintain the label’s exclusivity and avoid selling them on a lower price.
However, another reason for this act is probably a real financial benefit for the brand. According to a US law called ‘duty drawback’, if something is imported with a duty paid into the USA, and then later destroyed with Customs’ notification, the duty is paid back.
Luggage has very high duty % rates (15-25% on average), and LV bags are extremely valuable, so if we were to do the math, a single shipment of bags could have duties in the hundreds of thousands of dollars.
Put that for a whole year, and we bet they’re getting a good chunk of money back, if this is what they’re doing.
Though nobody from LV ever confirmed about burning of the bags, but people from the industry say that before destroying their discontinued bags, LV organises a sale for its employees.
It’s also said that LV does this so that everyone pays the same price for their bags!