US Markets
Friday, July 26th, 2024 1:42 pm EDT
Key Points
- Historic Olympic Sponsorship by LVMH: For the first time, a luxury brand, LVMH, has become an Olympic sponsor, investing approximately $160 million. This partnership is showcased in the 2024 Paris Olympic Games through LVMH’s various brands, including Chaumet-designed medals, Louis Vuitton trunks, Moët Hennessy wines and spirits, and Berluti-designed uniforms.
- Challenges in the Luxury Market: LVMH’s sponsorship comes during a challenging period for the luxury market, particularly in the U.S. and Asia. Despite a significant sales increase in Japan, LVMH experienced a decline in the rest of Asia and a selloff in global luxury stocks due to disappointing second-quarter sales. Chairman Bernard Arnault remains optimistic about the long-term outlook despite current geopolitical and economic uncertainties.
- Pre-Olympics Executive Luncheon: French President Emmanuel Macron hosted a pre-Olympics lunch with key executives, including Arnault, Tesla CEO Elon Musk, and Airbnb CEO Brian Chesky, to discuss the economy’s evolution influenced by AI and robotics. This event aimed to encourage investment in France amidst political uncertainty, showcasing LVMH’s innovative spirit.
For the first time, a luxury brand is an Olympic sponsor, with the renowned empire of LVMH taking the lead. LVMH Chairman and CEO Bernard Arnault, in an interview at Dior’s flagship store in Paris, highlighted their unique partnership with the Olympic Committee, aiming to introduce novel elements to the Olympics. This sponsorship, a result of a year-long negotiation process, involves approximately $160 million of investment from LVMH, the parent company of iconic brands like Celine, Louis Vuitton, Loewe, Tiffany, TAG Heuer, and Dom Perignon.
This historic partnership is prominently showcased throughout the 2024 Paris Olympic Games, which officially commenced on Friday. LVMH’s Chaumet, with its roots dating back to 1812, has become the first jeweler in Olympic and Paralympic history to design the medals. These medals are housed in trunks crafted by Louis Vuitton, another LVMH brand. Additionally, Moët Hennessy wines and spirits are served in the hospitality suites, and French teams donned uniforms designed by Berluti, an LVMH brand, for the opening ceremony. Arnault emphasized that the sponsorship is not merely about brand promotion but about demonstrating the spirit of LVMH and the strength of France globally.
Arnault also attended the Viva Technology show in Paris, underscoring the company’s longstanding connection to sports and its values. He noted that sports will continue to play a crucial role in LVMH’s future, reflecting the company’s shared values with the sporting world.
This sponsorship comes at a challenging time for the luxury market, particularly in the U.S. and Asia. The Japanese Yen’s weakness has driven Chinese luxury shoppers to Japan, where they can purchase LVMH goods at lower prices. Despite LVMH’s second-quarter sales falling short of analyst expectations, leading to a selloff in global luxury stocks, the company reported a 57% increase in sales in Japan, contrasting with a 14% decline in the rest of Asia. Arnault remains optimistic about the long-term outlook despite the current geopolitical and economic uncertainties, including inflation and interest rates.
Ahead of the Olympic Games, French President Emmanuel Macron hosted a pre-Olympics lunch with global executives, including Arnault, Tesla CEO Elon Musk, and Airbnb CEO Brian Chesky. Discussions at the lunch centered around the evolving economy, driven by AI and robotics, and their implications for future generations. This luncheon is part of a broader effort by the Elysee to boost investment in France amid ongoing political uncertainties following a recent snap election.
In a lighter moment before the lunch, Arnault recounted a previous conversation with Musk about the whimsical idea of placing Louis Vuitton products inside a rocket, reflecting LVMH’s innovative and forward-thinking spirit. The collaboration between LVMH and the Olympics represents a significant fusion of luxury and sports, marking a new chapter in the history of both industries.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/26/lvmh-ceo-bernard-arnault-olympics-sponsorship-honors-france.html
