Question

In: Economics

True or False From the reading on Burberry-a luxury brand maker for bags and fashion products,...

True or False

From the reading on Burberry-a luxury brand maker for bags and fashion products, we can note that the company self-destroys a volume of it's production each year, just so that the prices can be kept artificially low.

Solutions

Expert Solution

FALSE: Luxury Brands like Burberry, yes obviosuly they self-destroy a volume of their productions each year. But its purpose is not to keep the price of their products artificially low but rather to prevent their items being stolen or sold cheaply. Burberry the top British fashion label, destroyed unsold clothes, accessories and perfume worth 28.6m pounds last year to protect its brand. Burberry burned their products and stated that the energy generated from burning its products was captured and making it environmentally friendly. Burberry has been working hard to make its brand exclusive and destroying their excess own products is a part of the process and the reason they are doing this is, so that the market is not flooded with discounts. Burberry does not want their products to get into the hands of anyone who can sell them at a discount and devalue their brand. It is the dirty secret of the fashion industry.


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