The Secret World of Luxury: What She Learned Leading Hermès, Godiva, and Burberry | Ep 242 with Virginie Costa

0:02so virginie if you ask anyone what's the number one luxury item that they would want to buy besides a yacht But when it comes to, you know, clothing or accessories, I'm sure almost every woman would say a Birkin. Like if you bought a woman a Birkin, that is probably the number one thing that you could buy any woman when it comes to the luxury items. What has kept Hermes and this mystique around, you know, this bag going for so long? That's a very good question. So thank you for having me. The mystique is exactly what I'm passionate about. it's the brand purpose and the brand equity. And the Birkin bag in itself has an amazing story.

0:48I know, I don't know if you heard it, but the bag actually was born after an exchange between the CEO of Hermes then and the famous actress, Jane Birkin. And what happened is that she had a huge tote bag that was all messed up in a lot of ways. And she, unfortunately, some of the items she was carrying with it went on the floor. So the CEO next to her was asking her, so I just noticed your bag. I think you need a bigger and more practical bag. And so he used a frame that's called the sac au courant, which is maybe a little more rectangle bag. And he made it a little more narrower this way, but expanded it on the side.

1:35And that became the Birkin bag. So first, the first thing is it starts with a iconic product, a unique brand equity and brand purpose. And what I've been very lucky to have met him, the CEO, went back when. And I remember what he said to me. He said, you know, at the end of the day, the product is what is the most important thing. The quality has to be unique. And when the product will be that fantastic, it will find its own customer. And so Hermes has carried on with that legacy and that thinking and is maniacally obsessed about the quality, about the integrity. and as a company, they have very strong values and culture.

2:26So at the end of the day, I want to say for me, it's the mystic of any luxury brands reside into the brand purpose. And I strive really bringing brands like this on a continuation story and a sustainable growth path. So when you see the rise of fast fashion, access to really inexpensive versions that are very similar to different things, do you think this is hurting the luxury market or helping the luxury market? It's an interesting one. I think it's a combination of both because in some ways, you know that you're with a fake bag when comes the time that you want to repair it. Because like anything else, you know, you need some repairs and some maintenance.

3:20What the luxury brands do also is that they accompany the product till the end. So as an example, if you have a Hermes bag, not necessarily a Birkin, whatever bags, and you have, you know, at the end, it starts to look a little older, you can bring it back to the store and they will expect it for you. They will tell you right away if it's a fake. And if it's not a fake, then you have the opportunity to get it fixed and repaired. So I think it helps in some ways to gain a larger audience. that would not go to those stores or to those malls. But on the other way, of course, they do fight all the time, counterfeiting.

4:09Everyone knows that counterfeiting is not the best way to produce. But that's why I guess it's a combination of both. And when you think about it, like your Birkin bag, as an example, it's an investment for life. the real one you know you will be able to carry it through to the next generation actually it will be that great quality that you can actually pass it on to your kids or send it to Sotheby's for an auction so that's that's pretty much what what my my view would be so it's been amazing if I go to a mall that has luxury stores like for example in Orange County where I live the mall is very busy If I go to a store that has like general stores that are not luxury, the mall is almost essentially dead.

5:01There's like nobody there. And I find it very fascinating how luxury stores are continuing to possibly thrive. I don't know all the numbers, but I'm guessing thrive more than stores that are non-luxury. What we're using, and it doesn't have to just be Hermes, but I know you've worked with many luxury stores. But when you look at, you know, because I think this is a big thing. Will malls die? Will they survive? Like this is always the talk every year is, you know, how are in-store opportunities? Does it still exist for brands? It's what's happening right now is like I think we're in a transition mode, you know, after COVID.

5:40Things are getting normalized a little bit again. So traffic in stores is always a question. It's not just the general stores. Luxury brands also look at that, at those traffic numbers. Um, and, um, I, I don't know that, um, it's only because you have luxury stores that you're going to get more traffic. And the reality is, uh, you, you want to touch the product, uh, in luxury. That's for sure. You want to know why you're, you're paying the price tag you're paying. Um, so the, the physical contact, uh, the client experience inside the stores as well, All of this does bring a specific interest. But yeah, the general question about is retail dead, I don't believe it personally.

6:37I think that now we're closing full loop, the 360 experience from my phone to my iPad to my visit in the physical space. And then I order online. So I think that retail traffic is an overarching, very valid point. But in the case of luxury, like I said, you want to feel it. You want to know that this is real. I'm getting the Birkin. So I'm sure a lot of people are working in these stores, working for these companies, are hoping that, you know, I want to move up one day. You know, I want to be like Virginie, and I want to be an executive for one of these companies. So what do you think helped you along the path?

7:25Was there something that you said, OK, I've worked for these companies. I know what they're looking for. I know what expectations are. Is there anything you can give there or even just any advice to someone who's starting off now in the beginning? And they're like, I want to be an executive one day. Sure. Listen, I chose finance because I really wanted to understand how businesses bring value and grow value. And also because I saw finance as a tool that can provide a great storytelling and can really enable the company to continue and grow. Early on, I realized numbers are not just enough. It's also about people.

8:08It's also about culture and purpose. So in terms of advice I would give to someone who wanted to follow a similar path is master the fundamentals, know your numbers, but then build trust. And don't forget that leadership is all about people and purpose. So you want to make sure that exactly you are someone that can bring value and be curious, be bold. Don't wait. Don't ask for permission to sit at the table. Step in. Take accountability and bring people along with you on the journey. The future belongs to finance leaders who can see the big picture and bring people with them. I'm sure when you grab your seat at the table or you make a seat at the table, there's snags along the way.

9:05I'm sure there was challenges. Anything that you remember that stands out that gave you a good lesson? Sure. Actually, two things. When I started my first CFO poster, so that was 20 years ago, when I was a young woman, the environment was different, obviously, over there. And I had to trust my own voice, lead with confidence. and the way I approached it was really leading also by empathy. You need to understand people. You need to understand the different points of view. And the best finance leaders are enablers and connectors, which is something that I've always been passionate about, which is connecting the dots.

9:53So, yeah, that's the first thing. The other thing I will remember, one of my mentors at the beginning of my career told me, let them make mistakes. That's how they will learn. And that was a bold statement, but it was very, very useful and helpful for the rest of my career, a growing talent. Being able to be in the same room as some of these executives, like you said, CEO of Hermes and these other organizations that you've been a part of, was there any commonalities among CEOs or C-suite at the highest level at these companies? No, they are all very different. They are all very unique. But the successful CEOs I've been lucky to partner with always, as I said before, always come from the place of the people first.

10:54Now we even call it human capital. This is the new denomination. But it's true. The people are your biggest assets. And if they are happy, they will stay with you. They will want to grow with you. And that's what matters. It's really driving people and making sure that everyone has a path. So I would say that if there is one commonality, that would be that the focus and the prioritization of people and talent. So when you look at success now where you're at in your life, because I'm sure, like you said, 20 some odd years ago, when you started, success looked a certain way. You achieved some of the successes or all that you're hoping for.

11:43But what does success look like for you now? So it's true. The role of the CFO has evolved tremendously over these past 20 years. I have also had a couple of opportunities where I hold both the CFO and the COO roles, the chief operation officer. And that was very helpful to me for the evolution exactly of finance. I see finance to me becoming a force on transformation. I led a few transformation offices, actually. And it's really the new phase. And transformation has always been a world that we use a lot around us. But since COVID, there has been a lot of transformation. A lot of companies had to adapt to the new normal.

12:37So to me, finance is about transformation. We will lead on AI adoption. We will redefine how we value people and intangibles and embed sustainability now into every decision. So the CFO will be key storytellers and translating complexity into clarity and helping businesses grow with purpose and integrity. So now the CFO role can handle a lot of other topics because of this unique viewpoint that enabled the companies to really see, like I said before, connecting the dots. Like if I move this, what that's going to look like here. So for me, and I'm very passionate about business transformation, it brings challenges, but it's also where you have the biggest opportunities.

13:33and that's how usually you can grow faster. I imagine it could be challenging and exciting being the CFO just because you have to sometimes give the bad news. You also have to sometimes give the good news and maybe you have a CEO that wants to go one direction but if they're publicly traded, right? There's certain scrutiny that they have to follow and you might have to give them the bad news. But when you go into an organization and you're looking at transformation I'm guessing they bring you in for some sort of change normally, hoping like positive change or whatever the change might be. What are some of the first few things that you do when you start at an organization at that level?

14:14The first thing I always do, and that would be also an advice for future generations, is you need to learn the business. You really need to learn the business. To be a good CFO nowadays, you're not just reporting the numbers. You are driving the business. You need to have a financial strategy aligned with the purpose and the integrity of the brand. So the first thing I always do is I spend as much time as I can to visit the locations where the company is established, getting to meet as many people I can, always asking the same question. I go on a listening tour, actually, if you will, which is tell me what are the things we are doing right and tell me the things that you think we're doing wrong.

15:06These are my first questions always. And the next one is even sometimes more telling, which is what wakes you up at night? And that's how you get to really learn the business from the ground up. and the reason why I do that is going back to Hermes as an example, I've been so inspired by their onboarding. Whatever function you're in in the company, you need to spend your first week in a store and depending on your area, you will mirror a cell associate or you will mirror the cash register, you know, whatever function brings you in. But you'll spend a week in the store looking at the product, looking at the relationship between the clients and the sales associates and the products.

16:02And for Mondelez, which was my most recent post, I spent a lot of time visiting factories, visiting the different locations that were part of the region in Canada, Mexico. and just getting to meet as many people as possible to hear and be really open to exactly, like I said, tell me with the most honesty you can what's working, what's not, and what keeps you up at night. I like what you're saying there where basically there's no ego that you have to go in a store. If you're a C-suite, you have to go work in a store. I think that would be very interesting. They should film that. It'd be interesting to see how a new C-suite or vice president or president has to work into a store and the sales.

16:52I think that's amazing. AI is obviously transforming every industry. You touched on it a little bit earlier. I know you just chaired a CFO summit recently, and I'm sure AI was a big topic. Can you talk about maybe some learnings from that and how you see the future? Yeah, thank you. You know, it was an amazing event and we had CFOs and CHROs in the audience. AI was the number one topic. And the way I approach it right now is people are very nervous that they're going to lose their jobs to AI. and with me having worked for 30 years. So I always remember when my first job, there was no computer, no internet, no iPhones, only landlines.

17:44So I've lived through a lot of evolution of the technology and what I've noticed at each revolution or new step, it actually, it doesn't necessarily make you lose your job. it makes you change your focus and working on other tasks. In finance in particular, AI will help us continue our journey on automating anything that is really pure routine, transactional, same old, same old. And so that finance professionals can now focus even more so on the value creation, on the value chain. So to me, the future of finance is human-centered, AI-powered, and purpose-led. I hope you're right. I mean, I hope those things happen.

18:39It sounds amazing. I guess we will see, right? It seems like it's moving like 100 miles a minute. But I can imagine in the CFO or finance roles, AI could be an incredible tool, an opportunity to cut down on mundane things. And to really hyper focus on, you know, big picture, bigger impact items. But if you want to get in touch with you, they want to find out more, they want to follow your journey. How can they do so? Sure. You can find me on LinkedIn, Virginie Costa, where I share a lot of insights on exactly transformation, strategy and finance topic, as well as leadership. I also speak regularly on events and I'm always happy to connect with people.

19:26So especially if you're passionate like me, you can reach out this way. And you can also reach me via my website, virginicosta.com. And let's stay in touch. Well, Virginie Costa, great conversation. I know you and I talked earlier before we started about France and how we were just in Lyon. And that's where basically you grew up. Best food probably on the planet is in France overall. But this has been an amazing conversation. Thank you for today. And I'm really inspired about luxury in the future. And then obviously, you know, the CFO role that most people, the CFO role, I don't think it's like, like in a band, you have like the lead singer is like the CEO who's always out there.

20:14And the CFO is like the drummer who, who no one really knows, but it's like an integral part of, of the, of how things happen. But really, thank you for all that you do and joining us today. Thank you for having me. Thank you.