PROFESSIONAL ETHICS AND VALUES

ASSIGNMENT 1

A case study involving a moral dilemma

Burberry’s case of destroying their excess inventory

Submitted by:

Hema Shivaranjani(MFM/20/365)

Isha Singh(MFM/20/284)

Sri Pragathi (MFM/20/446)

Vatsala Agarwal(MFM/20/59)

Under the guidance of

Mr. Joseph Regy

Submitted in partial fulfilment of the requirement for the degree of

Masters of Fashion Management Studies

NATIONAL INSTITUTE OF FASHION TECHNOLOGY

BENGALURU

(2020-2022)
 TABLE OF CONTENTS

Certificate………………………………………………………...3

Acknowledgement………………………………………………..4

About Burberry…………………………………………………...5

The Problems/The Backlash……………………………………...6

Normative Ethics and Dilemma………………………………….7

Destroying excess stocks and why?...............................................9

Counterighting and Exclusivity…………………………………10

Burberry calls off stock Burning………………………………..11

Environmental impacts………………………………………….13

Who else is burning and why?......................................................14

Why can't it be recycled or reused?..............................................16

Why can't Burberry sell off their extra merch?.............................17

Conclusion ………………………………………………………18

References……………………………………………………….19

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 CERTIFICATE

This is to certify that the Assignment Report entitled which is submitted by Hema Shivaranjani,
Isha Singh, Sri Pragathi, Vatsala Agarwal in partial fulfilment of the requirement for the award
of degree Master of Fashion Management in National Institute of Fashion Technology. The
matter presented in this Assignment is duly acknowledged and has not been submitted for the
fulfilment of any other degree.

Mr. Joseph Regy

(Project Supervisor)

Department of Fashion Management Studies (FMS)

National Institute of Fashion Technology (NIFT)

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 ACKNOWLEDGEMENT

It gives us great pleasure to present the Professional Ethics and Values Assignment that has
been undertaken during the NIFT MFM first semester.

We would like to express our gratitude to all those who have helped and guided us for the
completion of this report throughout the working period.

We are especially grateful to our honourable Mr. Joseph Regy for his suggestions and support
which helped us immensely in preparing this report. Without his advice and support, it would
not be possible for us to complete this report.

Last but not the least we express our gratitude to all the individuals who have helped us directly
or indirectly

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 ABOUT BURBERRY

Burberry is a British luxury fashion house headquartered in London, England. It was

established in 1856 by Thomas Burberry who originally focused on the development of
outdoor attire after which the brand moved into the high fashion market developing a first of
its kind fabric called Gabardine which is completely breathable and waterproof. The first
shop opened in Haymarket, London, in 1891. It currently designs and distributes ready to
wear trench coats for which it is most famous, leather goods, footwear, fashion accessories,
eyewear, fragrances and cosmetics.

Image source: https://thefashionplatemag.com/modern-culture/fashion-trends/rihanna-spotted-out-in-new-burberry-logo-capsule-collection

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 THE PROBLEMS / THE BACKLASH

The luxury brand Burberry faced strong backlash in recent years for burning unsold products.
There are several viewpoints on this. Some argue that it is important to burn unsold products
to ensure the exclusivity and rarity of the brand. This may also help in preventing counterfeit
and illegal selling. Consumers and pressure groups feel that this is against the ever increasing
demand of being the brands sustainable.

In their 2018 financial report, Burberry “disposed” of nearly £30m of product. Further
digging showed they have destroyed over £90m of product over the previous five years.
Given their relatively high prices, this still places the raw number of destroyed items in the
tens of thousands. They claimed it was an attempt to combat counterfeiting and to protect
their supply chains.

People were understandably quite unhappy to discover Burberry had been incinerating their
unsold product, and people from all walks of life voiced their concerns. Burberry was roasted
on the very fire they started. Even worse, the burning was in direct opposition to Burberry’s
identity. The brand prides itself on being modern and sophisticated, a trailblazer. A
quintessentially British brand, one which overcomes challenges using innovation and
business-smarts. Incinerating their old stock was a betrayal of their values, and threatened to
ruin the relationships they’d built with their clients.

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 NORMATIVE ETHICS AND DILEMMA

Normative ethics, that branch of moral philosophy, or ethics, concerned with criteria of what
is morally right and wrong. It includes the formulation of moral rules that have direct
implications for what human actions, institutions, and ways of life should be like. It is
typically contrasted with theoretical ethics, or metaethics, which is concerned with nature
rather than the content of ethical theories and moral judgments, and applied ethics, or the
application of normative ethics to practical problems.

The central question of normative ethics is determining how basic moral standards are arrived
at and justified. The answers to this question fall into two broad categories—deontological
and teleological, or consequentialist. The principal difference between them is that
deontological theories do not appeal to value considerations in establishing ethical standards,
while teleological theories do. Deontological theories use the concept of their inherent
rightness in establishing such standards, while teleological theories consider the goodness or
value brought into being by actions as the principal criterion of their ethical value. In other
words, a deontological approach calls for doing certain things on principle or because they
are inherently right, whereas a teleological approach advocates that certain kinds of actions
are right because of the goodness of their consequences. Deontological theories thus stress
the concepts of obligation, ought, duty, and right and wrong, while teleological theories lay
stress on the good, the valuable, and the desirable. Deontological theories set forth formal or
relational criteria such as equality or impartiality; teleological theories, by contrast, provide
material or substantive criteria, as, for example, happiness or pleasure and here utilitarianism
ethic by Burberry.

The application of normative theories and standards to practical moral problems is the
concern of applied ethics. This subdiscipline of ethics deals with many major issues of the
contemporary scene, including human rights, social equality, and the moral implications of
scientific research, for example in the area of genetic engineering.

Ethical Dilemma- An ethical dilemma (ethical paradox or moral dilemma) is a problem in the
decision-making process between two possible options, neither of which is absolutely
acceptable from an ethical perspective. Although we face many ethical and moral problems in

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our lives, most of them come with relatively straightforward solutions.

On the other hand, ethical dilemmas are extremely complicated challenges that cannot be
easily solved. Therefore, the ability to find the optimal solution in such situations is critical to
everyone.

Every person may encounter an ethical dilemma in almost every aspect of their life, including
personal, social, and professional

How to Solve an Ethical Dilemma?

The biggest challenge of an ethical dilemma is that it does not offer an obvious solution that
would comply with ethics and norms. Throughout the history of humanity, people have faced
such dilemmas, and philosophers aimed and worked to find solutions to them.

The following approaches to solve an ethical dilemma were deduced:

● Refute the paradox (dilemma): The situation must be carefully analyzed. In some
cases, the existence of the dilemma can be logically refuted.
● Value theory approach: Choose the alternative that offers the greater good or the
lesser evil.
● Find alternative solutions: In some cases, the problem can be reconsidered, and new
alternative solutions may arise.

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 DESTROYING EXCESS STOCK AND WHY?

According to experts, destroying unsold stock was a technique commonly used by luxury
houses to maintain a shortage of their goods and the uniqueness of their brands. In Italy and
many other countries, these companies could also claim a tax credit for destroying inventory.
Luxury brands like Chanel S.A and Louis Vuitton Malletier too had resorted to the practice.

This is because the luxury brands see discounts and donating as a way to devalue their brand.
They want to control how and where and at what price their goods are sold. In a place like
Century 21 in New York, certain brands have their stock there that has two or three seasons
old and heavily discounted. Some brands are clearly fine with that but others are not.

Image Source: https://thehustle.co/lyft-scooters-burberry-burning-fitness-mirror/

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 COUNTERIGHTING AND EXCLUSIVITY

One of Burberry’s excuses for the incineration was to protect their intellectual property, to
protect themselves against counterfeiting. Because counterfeiting is a never-ending and
exceedingly costly battle for luxury brands. There are few strategies to overcome this sort of
problems, going beyond the logo and focusing on their exceptional quality would be one good
strategic move. To make fakes less attractive to consumers, luxury can emphasize on quality
and make it hard to replicate. Logos are easy to knock off but good craftsmanship is
irreplaceable. Studies identified product innovation and customers’ perceptions toward the
difficulty of production are the most important factors influencing customer’s willingness to
buy genuine luxury brands.

Burberry should continually introduce new limited collections as well as providing improved
product portfolios to attract concurrent customers. As well as widening the quality gap between
authentic and fake products, Burberry should focus on the intangible aspects of their offerings.
By emphasizing the comfortable and exclusive in-store sales environment, Burberry can
increase the perceived quality gap between genuine brands and counterfeits and create brand
advocacy among the status seeking consumers.

Burberry’s second excuse was to maintain control over their supply chain, to ensure they
remain exclusive without having to discount or donate any unsold items. So for this, instead of
producing surplus garments, keep customers fearing they’ll miss out. In fact, selling fewer
helps maintain the brand's exclusivity. Also, Burberry could collaborate on and release more
limited-edition collections.

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 BURBERRY CALLS OF STOCK BURNING

Burning, shredding and landfilling are the activities for destroying. Most companies do burning
so that they can claim the incinerators capture the energy.

Burberry destroys the unsold clothes, accessories and perfumes where in July 2017 alone it had
burned 28.6 million pounds or about $37 million, of clothing and cosmetics. There were many
criticisms for Burberry for destroying the products instead of placing them on sale or giving
them to a charitable cause.

Image Source: https://www.independent.co.uk/climate-change/news/burberry-burns-stock-designer-clothing-fashion-industry-environment-a8454671.html

On September 6, 2018, Burberry announced that it would stop the exercise of burning unsold
goods, with immediate effect. After this, Burberry initiated different programs to project the
image of an ethical company and also took several steps for the purpose.

Burberry also said that it was working with the sustainable luxury company Elvis & Kresse to
renovate 120 tonnes of leather offcuts into new products by 2024. It also planned to increase
efforts to reuse, repair, donate, or recycle its products and work to cultivate new sustainable
resources.

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Actually, a lot of destroying activities happen in India where there is one town in India, Panipat
which is specialized in shredding. And there is also a short film which documents women
shredding clothes that are brand new. This shows the women speculating that water in the West
must be so expensive, and that people can’t afford to do their laundry, and so that’s why it’s
cheaper for them to throw stuff out. From this we can know that burning is happening
everywhere around the world.

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 ENVIRONMENTAL IMPACTS

Burning clothes could release carbon dioxide and other greenhouse gases into the atmosphere,
which exacerbates global warming.The carbon emission from burning accounts for about 60
percent of polyester of the total fiber market, and this comes from oil. So, from this we can tell
that when polyester is burnt, we are actually burning oil.

Image Source: https://geographical.co.uk/nature/climate/item/3759-geo-explainer-carbon-emissions

There is also a ton of chemicals and finishing embedded in clothing and textiles through the
dyeing. When this stuff is burned, it filters into the air.

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 WHO ELSE IS BURNING AND WHY?

Here are just a few examples of companies who have been destroying their products:

1. Nike

Image Source: https://www.esquire.com/style/mens-fashion/news/a52669/nike-destroying-shoes-new-york-store/

The Nike store threw out several bags of unworn shoes, all of which had been slashed
with box cutters so no one could wear them. This is beacuse Nike doesn't want them to
be swooped up and sold by someone else, or to have the brand's cachet injured by being
on the feet of the homeless or poor.

2. H&M

Image Source: https://fashionunited.uk/news/fashion/burning-apparel-deadstock-sadly-waste-is-nothing-new-in-fashion/2017101926370

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 H&M said to have incinerated 60 tonnes of new, usable clothing since 2013.They sent
their clothing to be incinerated at a power station, but claimed that it was due to
unacceptable lead levels.

3. Cartier

Image Source: https://www.theguardian.com/business/2018/may/18/richemont-destroys-nearly-500m-of-watches-in-two-years-amid-buyback-policy

This owner destroys more than £400m of watches in two years to avoid them being sold
at knockdown prices

These are some examples but still there are many other brands who are destroying their
products

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 WHY CAN’T IT BE RECYCLED OR REUSED?

Some of it can be. Different kinds of garments are easier than others. One way to recycle
clothing is to shred it and to turn it into insulation, and there are fabrics that are quite good at
being turned into new fiber, spun into yarn, and then woven into clothes. But the minute you
start mixing fibers, like polyester with cotton, the options for recycling become more limited.
Then there’s the obstacles of buttons and zippers. Before a garment can be put through a
shredder, all the buttons and zippers must be removed, and that takes manual labor. With any
kind of waste management like this, there’s a cost attached to it, and it’s often cheaper just to
destroy it.

Image source: https://www.businessoffashion.com/articles/luxury/luxury-brands-burn-unsold-goods-what-should-they-do-instead

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 WHY CAN’T BURBERRY SELL OFF THEIR EXTRA MERCH?

Why can’t it be donated?

Historically, a lot of the donations have gone to Africa, Latin America, South America, and
to some countries in Asia. But in the last couple of years, a number of African countries, like
Kenya and Uganda, have actually banned the importation of secondhand clothing from the
West. It suppresses their own textile and apparel industry, since they can’t compete with the
volume and the very low price of the secondhand goods.

Why can’t they sell off their extra merchandise?

They see discounts and donating as a way to devalue their brand. This is where we get to the
thing that nobody wants to talk about: The retail price of a Burberry product has nothing to
do with its actual value. When you buy something from it and you pay full retail, that money
is actually paying for the massive advertising campaigns.

Image source: https://www.peepingmoon.com/news-fashion/news/25191/Heres-why-Burberry-is-burning-outfits-worth-million-pounds-every-

year.html

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 CONCLUSION

When the British luxury label Burberry said that it had burned tens of millions of dollars of
unsold goods — an announcement that prompted fierce criticism — the practice was justified
as an effort to maintain its “brand value.” The company claimed it took care to minimise the
amount of excess stock it produces and is seeking ways to reduce and “revalue” waste.

With many customers, particularly younger shoppers, becoming more ethically and
environmentally conscious, the practice was becoming increasingly damaging to Burberry’s
image. Finally, the company said that it would stop destroying unsold merchandise, adding
that it would also stop selling products that used real animal fur.

In this assignment we countered the dilemma of Normative Ethics.

The normative approach to ethics, which is the largest branch, deals with how individuals can
figure out the correct moral action that they should take over their own gains or in this case
profits and luxury brand image of Burberry over the environmental effects and social needs of
people.

After the assignment we came to know to realise with the question that, do you think companies
will follow in Burberry’s footsteps and stop destroying their merch? Well I think so. I do think
it will take some time because we are talking about a whole system, and it will not come to a
halt because of a little bit of bad publicity. But I do think that being called out forces brands to
take a look at what’s happening and start to have conversations about what they can do about
it.

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 REFERENCES

● https://www.vox.com/the-goods/2018/9/17/17852294/fashion-brands-burning-
merchandise-burberry-nike-h-and-m
● https://nypost.com/2018/07/19/burberry-burned-36-5m-of-unsold-clothes-last-year/
● https://www.nytimes.com/2018/09/06/business/burberry-burning-unsold-stock.html
● https://www.theguardian.com/fashion/2020/jul/15/burberry-to-cut-500-jobs-
worldwide-in-55m-cost-cutting-drive-covid-19
● https://www.independent.co.uk/climate-change/news/burberry-burns-stock-designer-
clothing-fashion-industry-environment-a8454671.html
● https://www.theguardian.com/business/2018/may/18/richemont-destroys-nearly-
500m-of-watches-in-two-years-amid-buyback-policy
● https://www.vox.com/the-goods/2018/9/17/17852294/fashion-brands-burning-
merchandise-burberry-nike-h-and-m
● https://www.businessoffashion.com/articles/luxury/luxury-brands-burn-unsold-goods-
what-should-they-do-instead
● https://www.businessoffashion.com/articles/luxury/luxury-brands-burn-unsold-goods-
what-should-they-do-instead
●

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