Large fashion groups such as LVMH, Prada, Chanel and Inditex will be banned from destroying unsold clothes and footwear in the EU from July 19, forcing the industry to overhaul its excess‑stock strategy. The rule removes a key tool that luxury houses use to maintain scarcity and desirability, compelling them to absorb higher inventory costs, expand discount channels or reduce production.

A court case this week revealed that Chanel routinely destroyed thousands of unsold products in Hong Kong. Chanel now recycles unsold items through its L’Atelier des Matières, founded in 2019, to return materials to circular supply chains. Between 4 % and 9 % of textile products sold in Europe—about 264,000 to 594,000 tonnes a year—are destroyed before use, according to the European Environment Agency.

The ban, approved in 2024 to curb over‑production and waste, allows destruction only when goods pose health or safety risks, are counterfeit or irreparably damaged. Luxury brands face challenges: donating or re‑using could dilute brand exclusivity, while repair, storage or material recovery adds cost.

Experts predict tighter inventory planning and AI‑driven forecasting will become competitive advantages. They also see the rule as a catalyst for new resale and up‑cycling channels, especially for outlet operators like Value Retail.