How LVMH seeks gold at the Paris Olympics: the luxury giant will dress the French team

This week, luxury goods giant LVMH unveiled the stylish opening ceremony uniforms for the French Olympic and Paralympic teams.

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

But these sports outfits also foreshadow how the £340bn company, run by the world’s richest man, Bernard Arnault, intends to make the most of its influence at the Paris Games.

LVMH is the most generous local sponsor and is rumored to have spent £130 million. But this outlay is modest, given the goals of LVMH, the biggest player in the global luxury goods game.

Arnault and his five children, who play key roles in the company, are determined to maintain their winning position in this challenging era of “brand bifurcation” in the sector.

In this trend, outlined by Swetha Ramachandran of fund manager Artemis, the truly wealthy continue to pamper themselves.

But aspirational buyers, without such deep wallets, are harder to attract. Post-pandemic “revenge” spending binge is coming to an end and cost-of-living pressures are taking effect.

Some brands seem to have an insatiable appeal, as demonstrated by the results of Hermes, maker of £7,000 bags, and Loro Piana, the LVMH house famous for its £4,000 cashmere jackets.

But other luxury clothing and accessory makers are struggling in a tougher climate.

Sales have fallen at Gucci, one of Kering’s brands, due to falling 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 includes makeup and skin care chain Sephora, may be thriving. But there is less appetite for Moët & Chandon and Hennessy drinks. Tiffany ornaments have also lost some of their luster.

LVMH CFO Jean-Jacques Guiony was not particularly optimistic (though not despondent either) about the watches’ prospects. The group owns Hublot and TAG Heuer.

However, analysts feared a worse outcome for all houses, with the result that LVMH shares rebounded, as did those of rivals such as Burberry and Kering.

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

Figures from LVMH showed that the Chinese may not be splurging at home, but rather treating themselves while on holiday in Japan, thanks to the weak yen.

However, as Quilter Cheviot analyst Mamta Valechha points out: “LVMH is a leader in its categories and has the ability to protect margins.” Burberry and Kering continue to be “stories of change.”

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

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

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

Each medal will contain a piece of the Eiffel Tower’s original metal, preserved apart from a restoration of the monument.

The links established by LVMH with French athletes, who are also celebrities, should help win over ambitious buyers, encouraging them to part with some of their disposable income.

Fencer (and photographer) Enzo Lefort and sprinter Timothee Adolphe are ambassadors for Louis Vuitton, the house of bags and suitcases.

Gymnast Melanie de Jesus dos Santos has assumed this position at the Dior fashion house.

Moët & 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 be counting on whether spectators in the least expensive seats – and television viewers – are persuaded that LVMH embodies French elegance and that its products are worth purchasing, despite the price.