charitable cause. Sass Brown, dean of Dubai Institute of Design and

Innovation, said, $$The fact that Burberry destroys stock is not a surprising

revelation for those with knowledge of the industry. This has been a longtime

practice to ensure the exclusivity of product. Unfortunately, big brands

like Burberry are locked into a broken system, part of which is financial. As

a publicly traded company, it is expected to show continuous growth on a

quarterly basis. But how can a brand show constant and consistent growth

on a finite planet, despite financial downturns, material scarcity, changing

weather patterns and a host of other market realities?$$

On September $6,2018,$ Burberry announced that it would stop the exercise

of burning unsold goods, with immediate effect. It also said it would stop

using real fur in its products, and would remove existing fur items. Burberry

had been using rabbit, fox, mink, and Asiatic racoon fur in its collections,

but it pledged to stop using them in the future.

After the stock burning fiasco, Burberry initiated different programs to

project the image of an ethical company and took several steps for the

purpose. Burberry said it was working with the sustainable luxury company

Elvis & Kresse to renovate $120$ tonnes of leather offcuts into new products

by $2024.$ It planned to increase efforts to reuse, repair, donate, or recycle its

products and work to cultivate new sustainable resources.

Questions:

$(4\backslash$times $5=20)$

$1.$ Discuss how controversies affect businesses.

$2.$ Evaluate the methods by which companies can practice sustainable

inventory management.

$3.$ Discuss how luxury fashion companies can resort to sustainable

practices to manage their surplus stock.

$4.$ Analyze the importance of ethical decision making in business.On September $6,2018,$ UK$-$based luxury fashion giant Burberry Group PLC

$($Burberry$)$ announced that it would stop burning unsold clothes after it

came in for severe criticism from industry analysts, environmentalists and

consumers for resorting to such a practice. Burberry's annusl report,

released in June $2018,$ said, "The cost of finished goods physically destroyed

in the year was $6\mathrm{.}28\mathrm{.}6$ million $[$about US$$37\mathrm{.}8$ million$],$ including $10\mathrm{.}4$

million of dertruction for beauty inventory." The total value of goods

destroyed by the label since $2013$ was &$90$ million.

Burberry announced that goods including clothes, accessories, and perfume

had been burned. However, it claimed that they had been destroyed not to

maintain exclusivity but to prevent counterfeiting. Burberry was founded in

$1856$ by Thomas Burberry $($Thomas$),$ who opened a clothing store in

Basingstoke, Hampshire, England $($See Exhibit I$).$ By $1870,$ the business had

started focussing on the growth of outdoor clothing. Being a sportsman,

Thomas was unhappy with the then popular rubberized waterproof raincost,

which was heavy, confining, and hot, and thus unfit for long outings. In

$1879,$ Burberry introduced 'gabardine', a firmly woven fabric made from

water proof linen or cotton yarn. Although tough and tesr$-$resistant, thir

cloth was lightweight and allowed air to circulate, malking the cost made of

it more comfortable than the heavy raincost.

In $2004,$ Burberry faced a huge challenge as its signature collection of

garments was being widely imitated by chesp, mock brands, malcing luxury

consumers feel that their luxurious clothing was similar to what worlcing

class youngaters were wearing. Burberry had witnessed a growing trend of

'chavs' wearing its trademark camel check clothing. Retailers who stoclced

Burberry merchandice felt that there was a rising negative association with

the brand among people of high social status.

According to experts, destroying unsold stock was a technique commonly

used by luxury houses to maintain a shortage of their goods and the

uniqueness of their brands. In Italy and many other countries, these

companies could also claim a tax credit for destroying inventory. Luxury

brands like Chanel S$.$A and Louis Vuitton Malletier too had recorted to the

practice.

Many analysts, environmentalists, and customers criticized Burberry for

destroying the products instead of placing them on sale or giving them to a