"Already Won Gold"… LVMH's Sponsorship Strategy After Investing 230 Billion Won in Top Luxury Brand [Paris Olympics]

LVMH's First Olympic Sponsorship in History
Partnership Contract Signed One Year Ago
Chaumet Medals, Berluti Uniforms, Louis Vuitton Storage Boxes
Designs of Medals and Uniforms Revealed... LVMH Style
Focusing on Enhancing Brand Value Amidst Sluggish Luxury Market

"Louis Vuitton Mo?t Hennessy (LVMH) has already won a gold medal at the Paris Olympics. Amid an unprecedented slump in luxury demand, Bernard Arnault, chairman of LVMH, is sponsoring the first-ever luxury sports event." - Bloomberg News

[Image source=EPA Yonhap News]

The French luxury group LVMH has elevated the image of the 2024 Paris Olympics to a new level. Not only has it made a massive investment exceeding 200 billion KRW, but it has also directly designed medals, the Olympic torch, and uniforms, fully infusing the Paris Olympics with LVMH’s unique luxurious style. Although there are as many as 80 official sponsors of the Paris Olympics, LVMH, which owns many high-end luxury brands, has clearly emerged as the star of the festival.

LVMH officially joined the Paris Olympics last July, one year before the event. The company signed an official premium sponsorship agreement with the Paris Olympic Committee and announced its intention to share creativity and craftsmanship at the Olympics. This is the first Olympic sponsorship in LVMH group history. The exact sponsorship amount was not disclosed. Industry insiders estimate that LVMH’s sponsorship fee was around 150 million euros (approximately 230 billion KRW).

Bernard Arnault, Chairman of LVMH Group (Louis Vuitton Mo?t Hennessy)

It took quite some time for LVMH to step up as a sponsor for the Paris Olympics. In December 2022, Thomas Bach, President of the International Olympic Committee (IOC), and Chairman Arnault met in person to begin discussions on this matter, and the two sides spent several months negotiating thereafter. The Paris Olympic Committee, which aimed to host the Olympics entirely through private sponsorship, received several conditions from LVMH. It is reported that during negotiations, LVMH even proposed ways for its brand buildings to be visible during the opening ceremony.

Regarding this, Chairman Arnault told AFP, "I did not want to be a sponsor simply in a financial sense," emphasizing, "I wanted to play a role in hosting the Olympics." This is interpreted as a strategic decision to actively showcase various luxury brands owned by the group, such as Louis Vuitton, Chaumet, and Berluti, to enhance brand value by leveraging the Olympics held in their home country.

On the 15th, Bernard Arnault, Chairman of LVMH (third from the left), and Thomas Bach, President of the International Olympic Committee (IOC) (second from the left), among others, are taking a commemorative photo ahead of the Paris Olympics.
[Image source=AFP Yonhap News]

Demonstrating this commitment, LVMH has been releasing various items for the Paris Olympics since early this year. First, in February, it unveiled the design of the medals awarded to athletes. The medals were designed by Chaumet, LVMH’s high-end jewelry brand.

Antoine Arnault, eldest son of Chairman Arnault and head of LVMH’s Image and Environment division, explained at a press conference at the time, "The Olympics are held in Paris, and LVMH represents the image of the nation, France. Within LVMH, there is an organization similar to an army dedicated to the Paris Olympics project. As a sponsor, LVMH strives to add creativity to moments of glory."

One month later, in March, Louis Vuitton unveiled a leather tray designed to hold the medals. This tray appears during the medal ceremonies. The design features the iconic dark brown check pattern synonymous with Louis Vuitton. Additionally, earlier this month, LVMH produced and announced uniforms for 515 volunteer medal ceremony attendants. LVMH explained that the uniforms were inspired by the values of the 1924 Paris Olympics held 100 years ago.

Moreover, Berluti, a luxury menswear brand, produced the uniforms worn by the French national team. At the event welcoming thousands of VIPs and businesspeople visiting Paris for the opening ceremony on the 26th, Mo?t & Chandon champagne and Hennessy cognac, both owned by LVMH, were reportedly served. Dior, another LVMH brand beloved by women worldwide, also made an appearance at the opening ceremony.

Despite pouring genuine passion and effort into the Paris Olympics, LVMH is not currently in a financially comfortable position. The Chinese economy, the largest market for luxury goods, is not as vibrant as before, and there are expectations that the economy will not recover easily by next year. Consequently, LVMH’s stock price has fallen more than 20% over four months since March this year.

[Image source=AFP Yonhap News]

However, amid the current unfavorable industry conditions, Chairman Arnault is focusing on enhancing brand value. In 2022, he emphasized the importance of transforming Louis Vuitton, LVMH’s flagship brand, from a mere fashion brand into a "cultural brand." Considering this, LVMH’s Olympic sponsorship is seen as an effort to promote not only its fashion brands but also the value of its expanding businesses such as hotels and restaurants.

Robert Williams, luxury editor at the fashion trade publication The Business of Fashion, told AFP, "France and Paris are a very powerful combination for luxury brands, so LVMH likely wanted to participate as much as possible," adding, "Sports have become an area where brands have expanded their reach in recent years, and sports events have large TV audiences, making them an excellent platform for promotion."