Branding: Burning £1 million worth of stock!

When building a brand, one doesn't think about burning £1 million worth of stock. But that is the reality facing Scottish golf clothing manufacturer, Lyle & Scott.

Lyle and Scott have been trading for over 100 years. Some of their sweaters sell for £140 a time! The Managing Director Derrick Campbell told colleagues in London that to keep the image of the company he'd rather torch some 20,000 items of stock worth a cool £1 million than let a discount outfit such as TK Maxx sell them to customers.

Such brand protection is also a key feature of Dior and Channel's Brand Strategy. They do not wish to follow Gucci's disasterous licensing agreement of the late 80s and early 1990s where Gucci allowed other companies to make products with their name on it, and this soon flooded the market with too many Gucci products. Supply outstripped demand and prices fell. Gucci as a brand was devalued and the image of the firm suffered due to the quality of the products not always being guaranteed by the licensees.

Of course many premium brands sell their product to supermarkets who them re-brand them as their supermarket own brands. This increases profits, but do so under the label of Tesco or Marks and Spencer for example.

Of course Lyle and Scott's announcement to the Press and Media that they are willing to burn £1 million of stock makes for good copy and indeed is some free publicity, something that every brand needs.

So perhaps Lyle and Scott are being very, VERY clever about the whole incident! Lyle and Scott have been doing well of late since they targeted a younger segment of the market. Sales are up 50% from last year and seem to be going from strength to strength. So a firm to watch out for!