How LVMH goes for gold at the Paris Olympics: luxury giant to dress Team France

This week, luxury goods company Leviathan LVMH unveiled the sleek opening ceremony uniforms for the French Olympic and Paralympic teams.

The navy and cobalt blue outfits, designed by the LVMH house Berluti, showcase the high-end chic credentials of the group, France’s largest company.

But these sports ensembles are also predicting how the £340 billion company, led by the world’s richest man Bernard Arnault, plans to make the most of its influence over the Paris Games.

LVMH is the most generous local sponsor, reportedly spending £130 million. But these expenses are modest considering the goals of LVMH, the biggest player in the global luxury goods game.

Arnault and the five of his children, who hold key roles at the company, are determined to maintain its dominant position in this challenging era of ‘brand bifurcation’ in the industry.

In this trend, outlined by Swetha Ramachandran, from fund manager Artemis, the truly rich continue to spoil themselves.

But ambitious shoppers, without such deep pockets, are harder to lure. The post-pandemic ‘revenge’ spending spree is coming to an end and pressure on living costs is intense.

Some brands seem to have an unquenchable appeal, as evidenced by the achievements of Hermes, maker of £7,000 handbags, and Loro Piana, the LVMH house famous for its £4,000 cashmere coats.

But other makers of luxury accessories and clothing are struggling in the more testing environment.

At Gucci, one of the Kering houses, sales have fallen due to declining demand among Far Eastern consumers. The custom of the Chinese is crucial to the success of any luxury brand.

This week’s first-quarter results showed LVMH’s growth was slowing.

The retail division, which also includes the makeup and skin care chain Sephora, may be doing well. But there is less appetite for Moet & Chandon and Hennessy drinks. Tiffany trinkets have also lost some of their luster.

Jean-Jacques Guiony, chief financial officer of LVMH, was not particularly optimistic – but not gloomy either – about the prospects for watches. The group owns Hublot and TAG Heuer.

Hopeful: shot putter Gloria Agblemagnon

However, analysts had feared a worse outcome for all homes, resulting in shares in LVMH bouncing along with those of rivals such as Burberry and Kering.

There was even talk of a possible soft landing for the sector.

The LVMH figures showed that the Chinese may not be lavish at home, but are treating themselves while on holiday in Japan, thanks to the yen’s weakness.

However, analyst Mamta Valechha of Quilter Cheviot notes: “LVMH is a leader in its category and has the power to protect margins.” Burberry and Kering remain ‘turnaround stories’.

The results increase the attention that will be paid to the visibility of the LVMH brands at the Olympic and Paralympic Games this summer.

The month-long events are seen as a perfect opportunity to remind the world that LVMH exemplifies elegance and success.

The winners will wear medals designed by Chaumet, founded in 1780, one of the group’s 75 fashion, jewelry, perfume and watch houses.

Each medal will contain a piece of the Eiffel Tower’s original metal, which will be set aside for restoration of the monument.

The ties LVMH has built with French athletes who are also celebrities should help win over ambitious buyers and encourage them to part with some of their disposable income.

Fencer (and photographer) Enzo Lefort and sprinter Timothee Adolphe are ambassadors of Louis Vuitton, the handbag and luggage house.

The gymnast Melanie de Jesus dos Santos has taken on this role at the fashion house Dior.

Moet & Chandon and the group’s other champagnes, such as Dom Perignon and Krug, will be served in the VIP suites during the Games.

But investors will be toast if spectators in the cheaper seats – and TV viewers – are convinced that LVMH embodies French elegance and that its products are worth buying, despite the price.