Luxury fashion houses left with billions of dollars of excess stock

Luxury labels left with excess stock after a disappointing festive season and a slow start to 2024 are trying to get rid of billions of dollars of items without falling foul of new European sustainability laws. In 2023, the world’s largest luxury goods company, LVMH, wrote down $3.5 billion in stock it couldn’t sell – up from $2.7 billion in 2022. Kering, which owns Gucci, had $1.5 billion in excess inventory, up from $1.3 billion. Previously, companies simply destroyed excess stock – but in 2018 Burberry’s annual report caused protests after it showed the company had burned $40 million in goods the previous year. France then banned the practice, and luxury houses have been reassessing how they manage excess product in a market where analysts say a 50 per cent full price sale rate is considered good. Both LVMH and Kering have introduced AI to improve planning; brands are also donating, upcycling and selling off more in outlet stores. Shoppers: head to Bicester.