Ex-Chanel Hong Kong staff accused of stealing bags meant for destruction

Two former Chanel warehouse staff are on trial in Hong Kong’s High Court, accused of conspiring to steal 724 handbags and small leather goods that had already been earmarked for destruction.

Former warehouse supervisor Ng Yiu-lun and ex-employee Cheung Ka-wai pleaded not guilty to conspiracy to steal when the case opened this week, Women’s Wear Daily (WWD) reports. Prosecutors say the pair worked with two other warehouse workers to carry out the plan, and that four people in total were arrested on the day of the incident.

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Chanel Hong Kong destroys between 10,000 and 20,000 discontinued products every six months as part of its inventory policy, according to the prosecution. The goods involved in this case had been boxed up on the 23rd floor of the Goodman Interlink facility in Tsing Yi before being sent down to the fifth floor for shredding.

How the alleged theft was uncovered

Suspicions were first raised in late 2016, when two warehouse workers reporting to Ng began volunteering for unusual amounts of overtime, WWD says. Rather than intervening immediately, Chanel instructed a warehouse manager to keep the pair under observation. CCTV footage from 1 February reportedly captured boxes allegedly being sealed and hidden. The next day, a masked man later identified as Cheung was seen using pallet jacks to move 33 boxes across six pallets into a lift bound for a secured underground loading area that required both a password and a key to access.

An assistant warehouse manager intercepted Cheung near a waiting truck and alerted police. Officers who searched the boxes found 601 handbags and 123 wallets, all items that should have already been destroyed weeks earlier.

Police later searched a warehouse one of the defendants had separately rented in Kwun Tong and say they recovered further shoes and handbags that had also been marked for destruction. That defendants face additional charges of handling stolen goods over the discovery, WWD reports.

Wasteful destruction in the fashion industry

It is well-known within the fashion industry that unsold stock is often destroyed, and public discovery of these methods frequently causes significant controversy.

Burberry encountered intense scrutiny in 2018 after disclosing that it had incinerated US$38 million in products, including clothing and cosmetics, to prevent unauthorized secondary market sales. In response to the backlash, the company vowed to halt such practices, promising to prioritize recycling, donating, or repairing excess items instead.

Moving to address this issue more broadly, the European Union recently announced that it is advancing legislation to prohibit the destruction of unsold clothing, accessories, and footwear.