This week, the luxury goods 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, which is France’s biggest company.
But these sporting ensembles also presage how the £340billion company, led by the world’s richest man Bernard Arnault, intends to make the most of its influence over the Paris Games.
LVMH is the most generous local sponsor, spending a rumoured £130million. But this outlay is modest, given the objectives of LVMH, the largest player in the global luxury goods game.
Arnault and the five of his children who have key roles at the company are determined to maintain its all-conquering position in this challenging era of ‘brand bifurcation’ in the sector.
Influence: LVMH boss Bernard Arnault – the world’s richest man – with the medals for the Olympic games
In this trend, delineated by Swetha Ramachandran, of fund manager Artemis, the really rich continue to spoil themselves.
But aspirational shoppers, without such deep wallets, are harder to lure. The post-pandemic ‘revenge’ spending binge is ending, and cost of living pressures are biting.
Some brands appear to have an unquenchable appeal, as shown by the performance of Hermes, maker of £7,000 handbags, and Loro Piana, the LVMH house famed for its £4,000 cashmere jackets.
But other makers of upmarket accessories and clothing face a struggle in the more testing climate.
Sales have tumbled at Gucci, one of the Kering houses, because of declining demand among Far East consumers. The custom of the Chinese is crucial to the success of any luxe brand.
This week’s first-quarter results showed that LVMH’s growth was slowing.
The retail division, which includes the Sephora make-up and skincare chain, may be prospering. But there is less appetite for Moet & Chandon and Hennessy drinks. Tiffany baubles have also lost some of their shine.
LVMH’s chief financial officer Jean-Jacques Guiony was not particularly optimistic – although not downcast either – about the outlook for watches. The group owns Hublot and TAG Heuer.
Hopeful: Shot putter Gloria Agblemagnon
However, analysts had feared a worse outcome for all the houses, with the result that shares in LVMH bounced, as did those of its rivals like Burberry and Kering.
There was even talk of a possible soft landing for the sector.
The LVMH figures showed the Chinese may not be splashing out at home, but are treating themselves while on holiday in Japan, thanks to the weakness of the yen.
However, as analyst Mamta Valechha, of Quilter Cheviot, points out: ‘LVMH is a leader in its categories and has the leverage to protect margins’. Burberry and Kering remain ‘turnaround stories’.
The results increase the attention set to be paid to the visibility of LVMH brands at the Olympics and Paralympics this summer.
The events, which last for a month, are seen as a perfect opportunity to remind the world that LVMH exemplifies elegance and success.
The victors will sport medals designed by Chaumet, founded in 1780, which is yet another of the group’s 75 fashion, jewellery, perfume and watch houses.
Each medal will contain a piece of the original metal of the Eiffel Tower, kept aside from a restoration of the monument.
The links formed by LVMH with French athletes who are also celebrities should help to win over aspirational shoppers, encouraging them to part with some of their disposable income.
The fencer (and photographer) Enzo Lefort and the sprinter Timothee Adolphe are ambassadors for Louis Vuitton, the handbag and luggage house.
The gymnast Melanie de Jesus dos Santos has assumed this role at Dior, the fashion house.
Moet & Chandon and the group’s other champagnes, such as Dom Perignon and Krug, will be served in the VIP suites at the Games.
But investors will raise a toast if spectators in the less expensive seating – and TV viewers – are persuaded that LVMH embodies French elegance and that its products are worth acquiring, despite the price.
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