For the first time a luxury brand is an Olympic sponsor. And it’s not just one brand, it’s the 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 Olympics,” LVMH Chairman and CEO Bernard Arnault told CNBC’s Andrew Ross Sorkin in an interview at Dior’s flagship store this week in Paris.
LVMH’s sponsorship deal took a year of negotiations and ultimately landed at about $160 million of investment from the parent company of brands like Celine, Louis Vuitton, Loewe, Tiffany, TAG Heuer and Dom Perignon.
The partnership is on display throughout the 2024 Paris Olympic Games, which officially kicks off on Friday.
LVMH-owned Chaumet, whose Parisian roots date back to 1812, is the first jeweler in Olympic and Paralympic Game history to design the medals. Housing the medals are trunks made by LVMH brand Louis Vuitton. In the hospitality suites, the company’s Moët Hennessy wines and spirits will be served. French teams will wear uniforms designed by LVMH’s Berluti for the opening ceremony.
“It’s not mainly to show the brands. It’s to show the spirit, the spirit of our group and the spirit of the country,” said Arnault. “We show the power of this country in the world.”
Chairman & Chief Executive Officer of LVMH, Bernard Arnault attends the Viva Technology show at Parc des Expositions Porte de Versailles on May 23, 2024 in Paris, France.
Chesnot | Getty Images
Arnault says sports is and will continue to be a key part of the company’s future.
“We have been always close to sport, because sport has values that we share,” he said.
Luxury market under pressure
LVMH’s Olympic sponsorship comes at a time when consumers in the U.S. and Asia are under pressure.
The weakness of the Japanese Yen is sending coveted Chinese luxury shoppers flocking to Japan to buy LVMH goods at a discounted price.
LVMH, seen as a bellwether for the luxury sector overall, led a selloff among global luxury stocks this week after its second-quarter sales came in under analyst expectations.
In its half-year report, LVMH reported sales in Japan up 57% for the second quarter, while the rest of Asia was down 14%.
“We are in a period where there is a lot of uncertainty on geopolitical grounds in the world, with some wars, some economic problems with inflation, with interest rates, and so on. But I am still quite optimistic long term,” said Arnault. “That trend midterm, will continue with ups and downs.”
Pre-Olympics lunch
On Thursday, French President Emmanuel Macron hosted a pre-Olympics lunch with executives from around the globe, including Arnault, Tesla CEO Elon Musk and Airbnb CEO Brian Chesky.
On CNBC’s “Squawk Box” Friday morning, Chesky told Sorkin one of the key topics of conversation at the lunch was the “changing nature of the economy probably powered by AI and robotics and what that is going to mean for the next generation.”
The lunch, hosted one day before the Opening Ceremony, is part of a broader effort by the Elysee to encourage investment in France, meanwhile uncertainty remains over the ruling government following the snap election in July.
Ahead of the lunch, Arnault told Sorkin the last time he and Musk had spoken, it was about an idea to put Louis Vuitton inside a rocket.
“We have to think,” said Arnault. “I’m afraid he will ask me to go with him in the rocket.”
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.