For the first time, a luxury brand is an Olympic sponsor. And it is not just one brand, but the entire empire of LVMH.
“We tried to find a way with the Olympic Committee, to be able to show maybe something that has never been done before with the Olympic Games,” LVMH Chairman and CEO Bernard Arnault told CNBC's Andrew Ross Sorkin in an interview at Dior's flagship store this week in Paris.
The LVMH sponsorship deal took a year of negotiations and ultimately resulted in an investment of approximately $160 million from the parent company of brands including Celine, Louis Vuitton, Loewe, Tiffany, TAG Heuer and Dom Perignon.
The partnership will be on full display during the Paris 2024 Olympic Games, which officially begin on Friday.
LVMH-owned Chaumet, whose Parisian roots date back to 1812, is the first jeweller in the history of the Olympic and Paralympic Games to design the medals. The medals are housed in trunks made by LVMH’s Louis Vuitton brand. The company’s Moët Hennessy wines and liqueurs will be served in the reception suites. The French teams will wear uniforms designed by LVMH’s Berluti for the opening ceremony.
“It's not primarily about showing brands, but about showing the spirit, the spirit of our group and the spirit of the country,” said Arnault. “We are showing the power of this country in the world.”
LVMH Chairman and CEO Bernard Arnault attends the Viva Technology trade show at Parc des Expositions Porte de Versailles on May 23, 2024 in Paris, France.
Chesnot | Getty Images
Arnault says sport is and will remain a key part of the company's future.
“We have always been close to sport, because sport has values that we share,” he said.
The luxury market under pressure
LVMH's Olympic sponsorship comes at a time when consumers in the United States and Asia are under pressure.
The weak Japanese yen is causing sought-after Chinese luxury buyers to flock to Japan to buy LVMH products at discounted prices.
LVMH, considered a bellwether for the broader luxury sector, led a sell-off among global luxury stocks this week after its second-quarter sales fell short of analysts' expectations.
In its half-year report, LVMH said sales in Japan rose 57% in the second quarter, while sales in the rest of Asia fell 14%.
“We are in a period where there is a lot of uncertainty in the geopolitical field in the world, with some wars, some economic problems with inflation, with interest rates, etc. But I remain quite optimistic in the long term,” said Arnault. “This medium-term trend will continue with ups and downs.”
Pre-Olympic Lunch
On Thursday, French President Emmanuel Macron hosted a pre-Olympics lunch with executives from around the world, including Arnault, Tesla Elon Musk, CEO, and Airbnb CEO Brian Chesky.
On CNBC's “Squawk Box” Friday morning, Chesky told Sorkin that one of the key topics of conversation at the lunch was the “changing nature of the economy likely driven by AI and robotics and what that will mean for the next generation.”
The lunch, organised a day before the opening ceremony, is part of a broader effort by the Elysee to encourage investment in France as uncertainty persists over the ruling government following early elections in July.
Before lunch, Arnault told Sorkin that the last time he and Musk had spoken, it was about an idea to put Louis Vuitton inside a rocket.
“We have to think about it,” Arnault said. “I'm afraid he'll ask me to accompany him on the rocket.”
Disclosure: NBCUniversal, the parent company of CNBC, owns NBC Sports and NBC Olympics. NBC Olympics holds the U.S. broadcast rights to all Summer and Winter Games through 2032.
