Earlier in July, news broke that British luxury brand, Burberry, burnt their unsold products. It sparked a backlash of the brand's practices and the brand promptly promised to stop burning their products. The incident served a higher purpose — it called attention to the lack of sustainable product disposal avenues for luxury retailers.
“The truth is burning or destroying excess stock is nothing new in the retail industry,” wrote Delphine Lefay, the co-founder of a Hong Kong-based flash sale company called OnTheList, over email. For the past decade, the French-born Lefay has worked in fashion groups across both Paris and Hong Kong.
There are a few commonplace product disposal methods that she's observed — luxury retailers usually “organise staff sales first before destroying leftover stocks," while high street retailers hold “aggressive end-of-season sales, followed by outlet sales, and family and friend sales before either going to charity or destroy [products].”
Why destroy these unsold products instead of keeping them for further sales? There are two key consideration — storage costs and brand integrity. “For some brands, destroying unsold, past-season inventory also helps protect brand value, ensuring that their products do not end up in the counterfeit or parallel markets, and making the brand less coveted in the eyes of target consumers,” observes the 30-year-old Lefay.
The truth of the matter is that it really is cheaper to burn these goods than to redistribute them properly. “It is often a lot cheaper and easier to burn the products than to curate a sale and put in the [logistics and] man-hours to clear these excess inventories,” says Lefay.
While it is cheaper for luxury brands to incinerate their stocks, it may be more sustainable to redistribute unsold products through flash sale companies. Here, a Juicy Couture flash sale held in OnTheList's Central showroom in Hong Kong.
These are reportedly standard practices in the fashion and retail industries. Yet, in recent years, Lefay noticed that consumers are increasingly curious and disapproving of these disposal methods due to their growing appetite for sustainability and transparency.
“I think the reason why the backlash has been particularly intense in the last few years is because there used to be a lack of transparency concerning the way retail brands offload excess stock,” says Lefay. “But an exposé recently turned everything on its head by uncovering brands that used incineration and other environmentally harmful means to dispose of surplus inventory.”
When it comes to alternative disposal options for these luxury retailers, there are a few options — one of which include flash sale companies. These companies work directly with luxury brands to acquire leftover stock, negotiate sale guidelines so they adhere to these luxury brands' values, and sell them on their own platforms.
A flash sale of handmade Italian shoes, Santoni, by OnTheList in Hong Kong.
The 23-year-old Parisian company, Arlettie, was perhaps one of the earliest flash sale companies. Today, they hold private flash sales in both Paris and London. Then there's the 17-year-old French flash sale site, Vente Privées, which took their flash sales online. Over on American shores, the 11-year-old company Gilt, and the fellow Rue LALA works on the same business model. New York-based 260 Sample Sale throws sale events in brick-and-mortar spaces.
In Singapore, there is a similar business which opened in 2009 called Reebonz which holds flash sales both online and in brick-and-mortar spaces. However, in 2015, Lefay found that “there were few or close to no alternatives available to brands in Hong Kong for disposing or redistributing excess stock in environmentally sustainable ways, or without compromising brand value.”
A Reiss flash sale by OnTheList in Hong Kong.
Together with her co-founder Diego Dultzin Lacoste, Lefay founded OnTheList in 2016 in Hong Kong. OnTheList holds their flash sales in their showroom in the Central district, a stone's throw away from Lan Kwai Fong. In the past two years, Lefay has had over 150 flash sales with 3,000 visitors at each sale, and sold one million items. “That's an average of 6,667 products per sale that have escaped a fiery fate with incinerators,” Lefay jokes.
Even when it comes to flash sales, there are many rules stipulated by luxury brands that Lefay and team have to follow. “We work very closely with brand partners and adhere strictly to their guidelines to ensure their brand values are not compromised.”
The 30-year-old French Delphine Lefay and Diego Dultzin Lacoste jointly founded OnTheList in Hong Kong two years ago.
At the end of each sale, the leftover products will eventually be returned to the brands. While Lefay is not in control of what the brands do to these products, she encourages them to “donate their leftover items from the sales to charity.” To Lefay, it's anything but the incinerators.
Flash sale companies in the likes of OnTheList are merely here to alleviate the fashion waste predicament by redistributing these products to a broader spectrum of consumers. They cannot nip the issue in the bud — only the brands can. It all begins with accurate manufacturing. “I think the industry will be shifting its focus towards inventory intelligence and finding ways to improve stock visibility and operational agility because they can serve as precautionary measures to prevent unnecessary wastage,” explains Lefay.
OnTheList's flash sales are now available in Singapore.
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