Our collective attention span seems very short. This condition is exacerbated by the equally short news cycle that seems to thrive on feeding us the drama of the moment. The financial community is no less guilty of the “short termism” malady, with its increasingly myopic attention on quarterly earnings, and punishing the slightest corporate misstep.
Publicly traded companies are painfully aware of this intense scrutiny. Consequently they walk a delicate balance between releasing news that is required for regulatory purposes, and what is relevant for the market to know. The cost of having a news release misinterpreted by the financial community can range from damaging, to catastrophic. All this can take place in a very short period as news disseminates around the world in a heartbeat.
French-based corporation, LVMH, decided to confront this issue. The company name is an amalgamation of Louis Vuitton and Moët Hennessey. These two brands have a magical power. Yes, their products exude the notion of luxury, but they also define quality and, indeed, joie de vivre. The corporation also owns many other equally luxurious brands that are made by artisans located in 13 countries around the world.
Antoine Arnault, the eldest son of LVMH chairman Bernard Arnault, came up with the notion of Journées Particulières, or a “special days” event. Antoine is the company’s director of communications and image, and faced the dilemma of financial short termism versus the quality craftsmanship that his company delivers to its clients. During the days of the Journées Particulières, LVMH opens the doors of 56 of its maisons to the public. These range from Cloudy Bay wine in New Zealand to Benefit Cosmetics in California, and from the atelier in Paris where Christian Dior carved out his New Look in the 1940s, to the Louis Vuitton family home in Asnières, where the Vuitton family refined its trunk making craft.
During the October 2018 opening, a group of local school children were able to enter a gilded salon overlooking the Place Vendôme in Paris, and see Empress Josephine’s diamond tiara on display. It is the oldest tiara ever created by Chaumet. A Chaumet representative was running through the history of the salon, explaining to the children that it was in this salon that the Polish composer Frederic Chopin died in 1849. The richness of the history and lore had a profound effect on the children.
In another location just off the Champs-Élysées, a tour group was able to enter the atelier of LVMH menswear brand Berluti, where made-to-measure shoes start at EUR 4,000. The bottiers, or artisan boot makers, were starting to welcome the first groups of the 1,000 or so people that would tour the facilities over the ensuing weekend. These custom shoes would take 50 hours of artisanal labour to complete, and the time from initial consultation to delivery is usually 9 months.
Antoine Arnault was inspired to open up LVMH to the world by the Journées du Patrimonie. This French tradition was started 30 years ago, where once a year sites like the Elysée Palace or the National Assembly are opened to the public. LVMH began its practice in 2011, and has since opened its doors to the public four times, with the latest iteration of the event drawing over 150,000 people to view its inner workings.
The world of finance is driven by information. This information is then digested and then acted upon. Decisions are often driven by being the first to act, with faster being better. This activity can tend to be manic, impacting individual companies and even the overall markets. While LVMH must also be judged by its earnings and ability to remain relevant in an increasingly changing environment, the company has also successfully communicated to its shareholders that another perspective is warranted and equally appropriate.
Antoine Arnault felt that LVMH deserved better than the stereotype that was projected around earnings. The company is composed of thousands of artisans who are proud of what they do and are preserving the savoir-faire of houses with hundreds of years of tradition.
While LVMH occupies a unique space in the financial markets and in our lives, Antoine’s message is relevant across the board. While it is important to be mindful of news and trends, it is equally or more important to focus on quality, and the long term. Over time quality always delivers, and by focusing on the long term we will reap the rewards of investing in quality.
Faced with current uncertainty in the markets and increased volatility that will test our resolve, that message is as important now as it was when the Vuitton family first learned the art of monogrammed trunk making. Looking back over the history of market returns, this perspective has proven that staying invested for the long term, despite short term volatility, will deliver high quality returns.
It’s then up to us to manage the joie de vivre. LVMH is happy to help us in this regard. That is, after all, what life is all about, oui?