No More Destroying Clothes
Large fashion groups in the EU have just been banned from destroying clothes and accessories.
Large fashion groups in the EU have just been banned from destroying clothes and accessories. The regulation was approved back in 2024 as part of efforts to reduce textile waste and overproduction.
Major clothing groups like LVMH, Prada and Chanel will be particularly impacted by this, since destroying clothes has been a regular inventory management tool for them. This ban also comes at a time where a high proportion of luxury clothing is being sold at a discount, reflecting weaker consumer demand and excess stock. It was also recently revealed in a court case that Chanel routinely destroys thousands of unsold products in Hong Kong.
Analysis
The destruction ban is more damaging for the earlier mentioned luxury brands rather than high street fashion brands because luxury brands destroy clothing to create artificial scarcity. It is the scarcity of the luxury clothing that lends this clothing a great deal of its value, justifying its pricing. Coupled with the high levels of discounts the sector is already having to concede, the destruction ban is worsening the underlying problem for these fashion brands, which is that there is weak consumer demand relative to levels of production.
What does this mean for the sector?
- Luxury brands face a fundamental tension between the scarcity premium they sell their products at and compliance with this new destruction ban
- There is a compliance grey area in that these fashion groups may move product destruction outside of the EU to avoid the ban which requires regulatory scrutiny
- Retail stores and secondary market platforms stand to gain from this ban as brands look for compliant methods to get rid of excess stock
How to use this in applications
Regulatory teams at law firms will be advising these fashion clients on what the new rules require in practice, like what sort of goods are covered and what the permitted exceptions are. There is also the question of how overseas destruction might work and whether this would still attract liability that the law firms will have to advise on.
Commercial teams at law firms will advise fashion brands on contractual changes that come with supply chain adjustments. As these fashion brands work out regulation compliant stock disposal routes, this will involve contracting new relationships with retail outlets, donation organisations, or material recovery businesses.
We explain how this story can be discussed in written applications and interviews. Register now for free to unlock the full article.
Register now to unlock the full free article
