Global luxury brand Burberry announced last week that it will discontinue its policy of incinerating unsold merchandise after a backlash to news that it had destroyed more than £28 million worth, around half a billion rand, of its fashion and cosmetic products over the past year to guard against counterfeiting. It’s not an uncommon industry practice and until fairly recently, local retailers would also dispose of excess products this way.
Destroying unsold products protects their intellectual property and brand value. You’d be pretty upset if you are the boss and turn up at a company event in your (full-price) Burberry frock – only to find Cheryl and Nobuhle from the typing pool wearing exactly the same thing they picked up on Bid or Buy at a fraction of the price you paid.
According to Burberry’s latest annual report, it works with “specialist incinerators that are able to harness the energy from the process”. H&M has previously disclosed that it also had old stock burned in incinerators in Sweden to provide electricity. Last year The New York Times reported Nike deliberately slashed trainers to prevent them from entering the market at a discount.
Before we give Eskom any smart ideas (considering its proposed price increases already mean paying for electricity risks you losing the shirt off your back) a South African non-profit has found an elegant solution to prevent the destruction of perfectly good garments while creating a new generation of entrepreneurs.
Tracey Chambers worked as a financial manager at Woolworths and noticed that the company had a high level of write-offs of product at the end of each year. She discovered the group would put old stock into a landfill. She approached CEO Ian Moir and told The Solutionist Thinking podcast that “no-one in Woolies had ever made a decision so fast.” She convinced him that Woolworths should donate the excess stock to a new non-profit she and a friend Tracy Gilmore had set up called The Clothing Bank.
Most South African retailers are now on board. Last year they delivered about R100 million worth of stock to The Clothing Bank’s six depots around the country.
Chambers runs a two-year entrepreneurship programme teaching disadvantaged women (men are now being included, more on that later) how to run micro-enterprises. They go through a tough selection process. Chambers is adamant that what she does is not charity and she can only assist those willing to assist themselves in improving their own lives. More than 3,000 women have been through the programme and she glows when talking about individuals who have been able to put children through university and those who have been able to improve their homes over time.
In simple terms, women are given an introductory course in buying and selling at a profit. Their first stock is advanced to them and they are expected to return and pay for that stock in a short period of time. Once they start creating cashflow they are able to buy product and sell it on in informal markets in communities where they live.
Chambers and Gilmore realised though that they were only tackling part of the problem. The women were being empowered and were gaining independence, but were going home to often dysfunctional and dangerous relationships where husbands and partners felt side-lined from the economy too.
A recent partnership with the Clicks chain has meant product diversification for The Clothing Bank. The firm has plenty of electronics imported into the country that have a fault and are returned to its stores and cannot be sold as new. The Clothing Bank has started training men to do repairs and take over the stock on the same basis as women get clothes, and are able then too to start micro-enterprises. It’s early days on the electronics front, but Chambers says The Appliance Bank is already yielding positive results.
(The Clothing Bank is hosting an Open Day at all of its depots this Thursday 13 September. For details contact: email@example.com)
Bruce Whitfield is a multi-platform award winning financial journalist and broadcaster.
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