Next week is not going to be an easy week for some. The next one will be even more difficult for others. On April 16, LVMH will announce its sales results for the first quarter of the year. Next will come Kering (which has already warned that its prices will fall by around 10% instead of the 3% anticipated by analysts), Prada and Hermès. Not everyone is expected at least (according to UBS, LVMH sales will grow by 3%, Hermès by 12% - if you control how much supply you respond to your demand with, you have more control over your results - and, according to Jefferies, Prada 9.3%), but they are all suffering from what is beginning to be considered a luxury crisis in the Chinese market. Still, there are those who have reason to feel optimistic.
There is no doubt that 2024 is going to be another good year for LVMH, something that the group ensured in July 2023 by becoming a premium sponsor of the Paris Olympic Games for around €150 million. That is the price it has paid to reach a sponsorship agreement with the French government (some say that the ties between said government and Bernard Arnault's group are too close, but the reader names a government that does not pay attention to which is not only the largest company in its country, but also in all of Europe in terms of market capitalization), but the disbursement that the group and its firms will make during the two weeks in July in which the event will be held will be much elderly.
The agreement means that Louis Vuitton, Dior and Berluti will enjoy a presence in different formats including the production of uniforms for athletes, and that Möet Hennessy will sponsor and shower the celebrations with champagne. In addition, this week the medals that Chaumet has created for the competition were presented.
Likewise, it ensures LVMH priority access to all advertising spaces in Paris (a city that expects to receive 15 million visitors) not contracted on a long-term basis and makes the group the owner of the advertising rights on French television and television. Korean (note that in 2022, two billion people turned on their TVs to watch the Beijing Winter Olympics). With this panorama, the rest of the conglomerates and fashion brands (at least those that do not sponsor teams or athletes, such as Ralph Lauren or Hermès) have given up before the starting gun sounds.
A note before continuing: in terms of presence there are elbows in the category of sports brands: Adidas is the other major sponsor of the event, but Nike will stand out by signing the equipment of all the athletes in the United States, the national teams of basketball from our country, China, France and Japan; of the athletics representatives from Canada, China, Germany and Kenya and the breakdancing representatives of Korea.
Back to luxury: Are those millions of visitors and viewers potential customers? No, but it is a great opportunity to strengthen the idea that fashion (and luxury) are part of culture, especially among those people who continue to underestimate its importance. It is a great opportunity to stamp a brand's logo on everyone's imagination.
If there has been a trend that all brands have followed in recent years, it has been to choose athletes as ambassadors. They represent positive values, have loyal followers and tend to be less problematic than other celebrities (I'm also thinking of the exception of Dani Alves). Furthermore, in the eyes of the audience, these types of alliances are more credible because sports stars have traditionally been clients of these brands. Since the nineties, firms have also sponsored sporting events, such as Rolex with the major tennis tournaments or Louis Vuitton, which once again puts its name on the America's Cup to be held between August 29 and October 7 in Barcelona.
It is curious that the efforts of the fashion industry to get closer to sports are not being appreciated by those who are part of it. The Paris fashion weeks will be affected by the Games between the advance of dates (both the men's and couture weeks will be held between June 18 and 27), the problems of logistics (security controls, traffic, works…) and the increase in prices of flights and hotels. If the capital is generally a complicated city, a month before the Olympic Games can become a real test by fire. Still, the Fédération de la Haute Couture et de la Mode is confident that both events will be a success. We'll see who wins.
