Why H&M Destroys Unsold Clothes

What Women Really Think
Jan. 7 2010 6:00 PM

Why H&M Destroys Unsold Clothes

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Yesterday the New York Times ran a story about a cache of trash bags containing unsold H&M clothing that had been mutilated and trashed behind the H&M store on 35 th Street. More unworn mutilated clothes were found in the trash of a Wal-Mart contractor nearby. The story enraged people and rightfully so, and it became the 2 nd most tweeted topic on Twitter yesterday, forcing H&M to finally release this lame statement by spokeswoman Nicole Christie: "It will not happen again. We are committed 100 percent to make sure this practice is not happening anywhere else, as it is not our standard practice."

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The reason H&M mutilated the clothes is simple. If they trash them intact, H&M the retailer will be in competition with H&M the gifter. Clearly H&M is not concerned with street scavengers or mongo hunters colonizing their dumpsters. They are more concerned with their cheap merch flooding discount channels or coming back as "unpaid" returns at their cash registers. I understand the theory of not wanting to undercut your business. But I can't understand why H&M would deliberately trash its unsold merch when it could easily turn it into a revenue stream.

Destroying new clothes is a shameful and irresponsible act. It was also fiscally dumb, perhaps the least profitable way of handling unsold inventory. I called one of my sources (I'm writing a book about this topic), a man who buys and resells unsold textile inventory from retail and charity circuits. He asked that I withhold his name and business (the business is highly competitive and secretive). According to this "ragpicker," H&M could have done the following:

1. H&M could have made arrangements with a charity that would have carted away the garments and sorted and sold them as they do other high-volume donations. For this plan, H&M would have to be OK with the fact that its unsold merchandise would be resold as is and accept the potential market flooding and self-competition this would trigger. This plan is for karmic purposes only-but it could have been deftly used in a public relations campaign.

2. If the charities could not absorb the costs of trucking to and fro (no small matter) or integrate the H&M pick-up into their schedules, or if H&M was hellbent on mutilating the unsold merch to avoid competing with itself, the mega-chain could have opted to PAY approximately 10 cents per garment to have them carted away by a clothing recycler who would then shred the clothes into reusable fiber. (Usually, fiber ends up as car-seat and airplane-seat stuffing.) H&M could also use this as the basis of a "green" marketing campaign and, I wager, write off the costs as a marketing expense. Instead, however, they were caught punching holes and lobbing heels off their own merch, in a location that happens to be adjacent to a charity that clothes the poor. In the process, H&M pissed off Twitter and by extension, the universe.

3. By far the savviest option would have been for H&M to make a deal with a textile sorter and recycler-the same enterprise that could organize the fiber conversion-to cart away the garments but resell them to used clothes importers in Africa and South America. There are boatloads of money to be made by H&M in this scenario: The clothes would be picked up FOR FREE by the textile recycler (which would also save on labor-all that time cutting holes and packing Glad bags), plus H&M would be PAID about 50 cents per garment by the recycler. When you consider the volume of unsold clothes produced by the fast-fashion mega-chain, I'm guessing the revenue could reach tens of millions.

Many designers destroy their unsold stock. This is one of the many secrets of the fashion industry. They don't want their brands ending up on the hoi polloi or in some unsightly discount bin. I can't name the brand, but a VERY high-up and profitable one recently sent two million dollars worth of clothing and purses to the shredder. This goes on all the time; it's part of the business. Companies would rather destroy serviceable products than risk diluting their brand. The next time you're on a flight, think about what's inside the chair. If they advertise in Vogue, your butt is on it.

Fashion is a filthy business. I'm glad the cat's out of the bag.

Photograph of NYC H&M by Paul J. Richards/AFP/Getty Images.