AMTP Proceedings 2026
Document Type
Conference Proceeding
Publication Date
Spring 2026
Abstract
Firms in the fashion industry have a practice of disposing unsold inventory to protect their brand value. It has gained a lot of importance in the media due to increasing consumer awareness about sustainability and has led to consumer backlash. This research examines whether this practice negatively impacts firm value, contrary to the firm’s belief. Specifically, the authors examine the effects of news on inventory disposal on short-term cumulative abnormal returns using an event-study methodology. Results show that news of this practice has a negative relationship with firm value for both the focal firm engaged in the practice and rival firms mentioned alongside. A higher volume of media coverage has a stronger negative effect and a higher sustainability score for the firm mitigates the negative effect. This research informs firms to rethink their brand protection strategies by taking into account the changing consumer preferences and increasing interest in sustainability.
Recommended Citation
Rangaswamy, Priya; Daraboina, Rohini; and Yu, Lizhihan, "When Brand Protection Leads to Brand Crisis: The Case of Disposable Fashion" (2026). AMTP Proceedings 2026. 56.
https://digitalcommons.georgiasouthern.edu/amtp-proceedings_2026/56
Included in
Fashion Business Commons, Management Sciences and Quantitative Methods Commons, Marketing Commons
