Louis Vuitton (LV) is a renowned brand celebrated for its luxury fashion items, including shoes, watches, jewelry, accessories, and sunglasses. With over 460 stores spread across 50 countries, the company has gained worldwide recognition.
While LV products are widely known for their high prices, it may come as a surprise to learn that the brand actually destroys all its unsold bags at the end of each year. Rather than modifying or donating these items, LV opts to incinerate them, and the rationale behind this practice is rather peculiar.
The company takes this extreme measure to ensure that its products are not sold at reduced prices, thereby preserving the exclusivity that LV is renowned for. Another contributing factor to this practice is a US law known as “duty drawback.” Under this law, if an imported item is destroyed with notification from customs after duty has been paid on it, the company can claim a refund of the duty.
Given that Louis Vuitton bags are subject to high duty rates, averaging around 15-25 percent, the company recoups some of its losses through these duty refunds.
