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French luxury houses give unsold goods a second chance

In the extravagant world of the French luxury industry, brands used to prefer destroying their unsold goods rather than offering their high-priced products at a discount.

upcycling French fashion
Luxury French fashion houses. Photo: Geoffroy VAN DER HASSELT / AFP

But gone are the days of binning the coats, handbags and shoes pooh-poohed by shoppers after a new anti-waste law came into force at the start of the year.

Now luxury houses are managing their stocks more carefully, offering deals to staff, making donations and recycling goods.

“It’s a subject that has become important today,” said Julie El Ghouzzi, a luxury goods expert at the Cultz consulting agency.

She pointed to the scandal that engulfed Burberry in 2018 after the British luxury brand disclosed that it had destroyed £28 million pounds (€34 million at current exchange rates) of unsold goods in 2017 – the equivalent of 20,000 of its trench coats.

Following the firestorm the revelation triggered, Burberry announced it would halt the practice from the following year.

Markdowns to move goods are not an option in the luxury business as lower prices can undermine the attractiveness of their labels, which thrive on their elite status.

“In the luxury sector, if the price tag is lower, so is the desire to buy it,” said El Ghouzzi.

Mentalities have changed

Luxury houses are paying more attention to the subject now, said Arnaud Cadart, a portfolio manager at Paris-based asset manager Flornoy.

“Mentalities have changed, we’re no longer in an economy that values unbridled creation above all else,” he said.

Also gone is the mentality that “if it doesn’t work we’ll destroy it,” said Cadart.

Now luxury houses strive to fine-tune their stocks.

The Kering group, which owns the Gucci, Saint Laurent, and Balenciaga labels among others, has invested in artificial intelligence in order to better manage its stock.

At its competitor LVMH, the world’s largest luxury group that includes Louis Vuitton, Dior, and Celine among many others, environmental development director Helene Valade said “the luxury business model is closely adjusted to demand” with low levels of stock being held by the firms.

Nevertheless, she acknowledged that the new law will push luxury houses to
learn even more about their clients to better anticipate their purchases and thus reduce stocks to a minimum.

El Ghouzzi said Louis Vuitton is already quite good at keeping track of its stock.

“They know exactly what they have in stock and are capable of managing it down to the millimeter,” she said, adding “that’s not the case in many other houses.”

When there are nevertheless unsold goods, selling them to staff at advantageous prices is one option. These large fashion groups have large staffs, with more than 150,000 employees at LVMH, 38,000 at Kering and 16,600 at Hermes.

Gifts to associations is another option.

LVMH has a partnership with Cravate Solidaire, an association that collects donations of professional clothing and provides it to people with disadvantaged backgrounds trying to land jobs.

Upcycling

Designers have also begun to make use of discarded or leftover materials, a practice often called upcycling.

“Previously, a designer with a brilliant idea would go search for materials to realise their idea,” LVMH’s Valade told AFP.

“Today, the process is sometimes the reverse: there are certain designers who start with the materials at hand – old collections, unused fabric hanging about, leftover bits of leather… and it inspires them,” she said.

This was the case for late American designer Virgil Abloh, who was the artistic director of Louis Vuitton’s menswear collection from 2018 until his death in 2021.

Marc Jacobs in New York works with Fabscrap, which recycles unused fabric to create insulation or products like furniture lining, or donates it to students and artists to use for their creations.

LVMH also has a partnership with WeTurn, which collects unsold clothing and
material to recycle it into new thread and fabric.

Hermes said that in 2020 it sold 39,000 upcycled products.

“The activities which destroy the most are fashion, leather goods and cosmetics,” said portfolio manager Cadart.

Given the efforts undertaken and the current economic conditions, items are more often out of stock than lying about unsold.

“Since 2014, Hermes has thrown out almost nothing, everything flies off the
shelves,” Cadart added.

At LVMH, Valade said, “leather goods are, at the moment, in more of a situation of being out of stock” than not being sold.

She pointed to an upcycled Loewe bag made from scrap leather cuttings that sells for €1,700 and which is currently out of stock.

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WILDFIRES

More evacuated as forest fire reignites in southern France

A forest fire in France's southern Aveyron region has reignited, sparking the evacuation of 1,000 more people and burning a total of 1,260 hectares, local authorities said Sunday.

More evacuated as forest fire reignites in southern France

France has been buffeted this summer by a historic drought as well as a series of heatwaves and several forest fires, notably in the southwest.

READ ALSO: IN PICTURES: French drought intensifies as River Loire dries up

The Aveyron fire, which has been raging since Monday, appeared to be under control and dying out on Saturday afternoon when it suddenly reignited in a “virulent” manner, gobbling up 500 more hectares (1,235 acres), the prefecture said.

At least 1,000 people were evacuated from the village of Mostuejols near the city of Millau and six nearby hamlets, it said.

Some 3,000 people had been evacuated because of the fire, but were allowed back when it appeared under control. No casualties have been reported so far from the blaze.

A local man was under investigation for accidentally starting the fire when a metal part of his trailer touched the road, sending off sparks that ignited the dried vegetation.

In eastern France, police said on Saturday they were banning entry to most forests in the Bas-Rhin region near the German border, in order to limit the risk of fires igniting.

Austrian firefighters help to extinguish a fire in a forest of South Gironde

Austrian firefighters help to extinguish a fire in a forest in South Gironde, near Belin-Beliet on August 13, 2022. (Photo by Thibaud MORITZ / AFP)

In the southwestern Gironde region around Bordeaux, another fire which flared on Tuesday was under control after rain fell overnight, a senior official said.

READ ALSO: Thunderstorms expected around contained French wildfire

The situation “considerably improved during the night,” Arnaud Mendousse, of Gironde fire and rescue, said.

He said there had been between 10 and 30 mm of rain in the region but on “terrain that is extremely dry”.

“We know that this offers a respite but does not signify an end to the fight. We know that if it does not rain in the next 48 to 72 hours, the risk will increase considerably.”

Mendousse said the humidity level has gone up and the temperature was relatively low at around 25 degrees Celsius, (77 Fahrenheit) adding: “The fire is not completely out and the soil remains extremely hot”.

EU members including Germany, Poland, Austria and Romania have pledged reinforcements totalling 361 firefighters to join the roughly 1,100 French ones on the ground, along with several water-bombing planes from the European Union fleet.

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