The CEO of Australia's textile, clothing and footwear body has slammed the state of today's fashion industry, saying she is ashamed at some of the practices taking place.

According to the Council of Textile and Fashion Industries of Australia (TFIA), an estimated 100 million units of stock are going to waste each year - some of which are intentionally destroyed by retailers before charities can even get a look in.

In January fashion retailer H&M was found to be slashing and dumping bags full of never-worn, unsold garments in New York - a city where one third of the population is poor.

The discovery sparked outrage until H&M said it would stop hacking up its surplus stock and "donate the garments to charities".

TFIA chief executive officer Jo-Ann Kellock says the practice of destroying excess product to avoid selling it for a discounted price or donating it to charity is also happening in Australia.

Ms Kellock says while she cannot name specific retailers, companies dotted from the low end of the fashion spectrum right up to the highest end are destroying unknown amounts of excess stock rather than donating to charity, finding another way to recycle the goods or ordering less product to start with.

"We know that these practices go on in Australia... everything from labels being cut off so the label can't be identified, sleeves being slashed, to garments being marked," she said.

"We are concerned because it goes to the waste issue and it goes to the landfill issue.

"But also we know there is a big consumer push - not just here, but globally - around industries and what they're doing in terms of their conservation and how they treat their products."

Ms Kellock says unsold stock is the sector's "elephant in the room".

She says she is ashamed at the amount of waste in her industry today.

"Most of the industry cost on a unit price basis - how much is it going to cost me to bring in this T-shirt - so decisions are based around those unit costs," she said.

"But the part that we're not taking into consideration is what happens when the product doesn't sell and what do we do with that product, and that's a big issue.

"It's the elephant the room - it's the thing that nobody wants to talk about, what happens to the stock that doesn't sell."

'Race to the bottom'

Ms Kellock says retailers should stop over-ordering stock for the sake of cheaper prices, and that they should also place a greater emphasis on design.

"Fashion is about producing more product quickly and it's not about that considered design space - how many clothes do we really need?" she said.

"We're going to have to learn to change our thinking, go back to thinking about how can we make a margin out of this product to sustain it.

"This whole race to the faster, cheaper, easier model, this race to the bottom, I think we are very close to the end point."

She says most retailers in the country are not designing for their target audience because they do not even know who their target audience is.

"Don't just tell me about how many dollars your customer can spend and where they live, describe to me what your customer looks like, the biggest person and the smallest person," she said.

"If you ask most of the leading designers in this country, they couldn't tell you.

"They need to know their market and in designing flattering garments for that market they will have less waste and they will maximise their sales."

She says the industry is facing more scrutiny from consumers than ever before, so the risk of a brand being exposed for its social irresponsibility is even greater.

"There is no one quick fix but we are saying to people 'look up, wake up industry'.

"We want the big retailers, the manufactures here, to look at their supply chains... because they will be held accountable."

'Buying social status'

But brand protection expert Julian Vieceli from Deakin University says while damaging stock may be unethical, it is a typical protection strategy.

"Retailers like Burberry and FCUK invest millions and millions of pounds every year in building up the brand, in protecting the brand, in meeting the needs of their target market," he said.

"People who are buying the brand are buying exclusivity, they're buying prominence and they're buying social status.

"So if you have excess stock, rather than just dumping it at very low prices, which would devalue it for your final consumers and actually damage your brand which you spend millions of pounds on, you would undertake some action."

He says what high-end fashion companies commonly do is damage their stock by either punching holes in it or undoing stitches before shipping it off to an outlet store.

"I think in the US, Burberry have a rule that the discount store has to be at least 100 miles from the main store," he said.

"It's the inconvenience of getting to the store, but also it's not shipping a current item off, it's not a Burberry trench coat that's a classic, you'll never see them at discount, but it's shipping off something that is slightly out of date, slightly damaged.

"And if you ship it far enough away then it becomes very inconvenient for the target market to get there."

Mr Vieceli says he can understand why companies do not simply donate their unsold stock to charity.

"It would make more sense to put it into an online website, where you can control the prices as opposed to donating it to charity," he said.

"From a social and ethical point of view it's probably not the greatest thing, but from a branding point of view, these companies invest massive amounts of money.

"I see it as just standard brand protection, to give away their A-grade stock would probably not be a great move on their behalf."