Reports were released to the media claiming that two of the world's biggest luxury brands are sitting on an inventory worth about €4.7 billion (around US$ 5.1 billion at the current exchange rate). The staggering amount of unsold products made even the most fashionable raise an eyebrow, while some entrepreneurs suspect that this is a way to stifle the supply and raise profit.
LVMH and Kering, the parent companies behind brands like Louis Vuitton, Gucci, and Saint Laurent, have unsold inventory more than double between 2014 and 2023, according to La Conceria's summary of Business of Fashion analysis.
In 2023 alone, LVMH reported €3.2 billion (US$ 3.5 billion) in unsold goods, while Kering clocked in at €1.5 billion (US$ 1.6 billion). That's a whole lot of handbags and stilettos gathering dust.
This mountain of unsold luxury items is bad for business and terrible for our planet. The fashion industry is already a significant contributor to Earth's overheating, and excess production only amplifies the problem.
Resources that go into creating these products include the following: water for growing cotton, energy for manufacturing, and fuel for shipping. When items don't sell, those resources effectively vanish into thin air.
Plus, there's the waste factor. In the past, some luxury brands would reportedly destroy unsold items to protect their image. While that practice is becoming less common (and is now banned in France), per La Conceria, finding eco-friendly solutions for thousands to millions of unused products is a massive challenge.
Both LVMH and Kering are aware of the issue, but their solutions are still a work in progress. At the time of the report in March, LVMH said that it expected to sell much of its excess inventory in 2024, per La Conceria.
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