British fashion house Burberry to stop burning unsold items

Burberry is to stop burning millions of dollars' worth of excess stock, it announced Thursday.

The British fashion house's annual report stated that it destroyed £28.6 million ($37.1 million) of goods for the year ended March 31, 2018, an increase on the £26.9 million in its 2017 financial year.

Now it will cease the practice and is likely to donate garments to charities such as Smart Works, a U.K. organization that provides interview clothes to unemployed women to help them get jobs.

The fashion brand will continue to work with companies such as Elvis & Kresse, a business that uses leather offcuts from Burberry products to create bags, belts and other accessories. It is also part of the Make Fashion Circular initiative that aims to make new clothes from renewable material and recycle old clothing.

The company also said it will no longer use real fur in its products. It currently sells products with fur trims, such as a wool trench coat with a fox fur collar listed at $2,195 on its U.S. site.

Burberry CEO Marco Gobbetti said in a statement emailed to CNBC: "Modern luxury means being socially and environmentally responsible. This belief is core to us at Burberry and key to our long-term success. We are committed to applying the same creativity to all parts of Burberry as we do to our products."

The announcement comes at a time of change for the 162-year-old company. Gobbetti is pushing for the firm to become a "higher luxury" fashion house, like Gucci or Hermes, and announced a 2 percent rise in full-year adjusted profit to £467 million ($604 million) in May.

Gobbetti, in charge since July 2017, hired Italian designer Riccardo Tisci as its creative director in March. Tisci replaced Christopher Bailey, who had been at the company for 17 years, and his debut collection will be shown at London Fashion Week on September 17. The company also revamped its logo, creating an interlocking TB pattern after founder Thomas Burberry, in August.

Burberry isn't the only company to destroy goods. Richemont, a maker of luxury jewelry and watches including the Cartier brand, was reported to have disposed of 481 million euros ($557.2 million) worth of goods in May to prevent them being discounted on the secondary, or "grey" market, which reduces their appeal.