Paris 2024: Bernard Arnault, the godfather of the Olympic Games in France

For decades, the French conglomerate LVMH has been the face of luxury for the rich who carry Louis Vuitton bags, Christian Dior clothes, spray Bulgari perfumes and drink Veuve Clicquot champagne.

This week, the world’s dominant luxury group, home to 75 high-end brands across fashion, jewelry, watches and alcohol, will be the face of a global event for the masses: the Paris Olympics, with billions of viewers around the planet.

With a major sponsorship role aimed at burnishing the image of the Games and the French capital, it is a new chapter in LVMH’s speciality of selling exclusivity on a grand scale under its chairman and chief executive, Bernard Arnault.

Bringing together and growing dozens of exclusive brands under one roof has put Arnault, 75, atop Forbes’ list of the world’s richest people. On June 3, Forbes estimated his wealth at $207 billion, well ahead of Tesla’s Elon Musk and Amazon founder Jeff Bezos. With stock market prices constantly changing, the three men often trade places (according to Forbes’ real-time billionaires list on Tuesday, Arnault and his family are currently No. 3).

LVMH cosmetics brand Sephora sponsored the Olympic torch relay. Berluti designed the uniforms for the French contingent for the opening ceremony. Jewelry brand Chaumet crafted the Olympic medals that will be housed in boxes designed by Louis Vuitton, whose headquarters at 2 Rue Pont Neuf will be hard to miss as the opening ceremony parade floats down the River Seine.

“We tried to find a way to do it, to do something more than just write a check and put up billboards on the sides of the streets.“Antoine Arnault, head of environment and image at LVMH and Arnault’s eldest son, told The Associated Press on Monday.

The scope of LVMH’s involvement “It is unprecedented for a luxury brand.“These brands have become more popular in the world,” says Luca Solca, a luxury goods analyst at research firm Bernstein. While these brands used to focus on athletic pursuits more associated with the wealthy (tennis, equestrian sports and sailing), LVMH and its competitors have increasingly used mainstream sports to reach customers and place a halo of excellence around their products.

“The award is a high-level association with sport as a universal language that all consumers understand.“, says Solca.

While his brands will be front and centre, Arnault’s low-key profile is a stark contrast to those of Musk and Bezos. Although his company is adept at digital marketing, he himself is not on social media. He can almost blend into the crowd, sitting quietly in his sombre suits in the front row of fashion shows. Unsurprisingly, though, he is well-connected: he received the Legion of Honour in March from President Emmanuel Macron, whose wife, Brigitte, taught French to two of Arnault’s children.

“He’s almost like a head of state; he has that level of influence.,” says political image consultant Frank Tapiro, dubbing Arnault the “godfather of the Olympic GamesTapiro, who worked with Arnault as creative director for the launch of the Miss Dior perfume, compared him to Louis XIV, the 18th-century Sun King famous for wielding incredible power over his capital from afar.

An engineer who started out in his family’s construction company, Arnault launched his career in luxury by taking over Financière Agache in 1984. He divested himself of the less attractive businesses in his acquisition, keeping only the crown jewels: Christian Dior and the luxury department store Le Bon Marché. Within five years, he had taken a stake in LVMH and become chief executive of the company, born from the merger of Moët Hennessy and Louis Vuitton, brands established centuries earlier.

Arnault made his fortune by defying conventional wisdom, building a conglomerate in a field where rarity and exclusivity are watchwords. The size of the company has created what Solca calls the “virtuous circle of the megabrand”Its size and vast profits allow LVMH to recruit top design talent, open larger, flashier stores in elite locations, and support its brands with marketing and advertising spend that each brand could never achieve on its own. That drives profits even further, and the cycle repeats.

LVMH is now three times larger than it was in 2009. Last year, it reported €86.2 billion ($93.2 billion) in revenue and €22.8 billion ($24.6 billion) in profit from recurring operations, for a profit margin of more than 26.5% — one that companies in sectors like autos, airlines or food retailers can only dream of.

It is a public company, but a family-run one. Arnault’s five children each play roles, leading to media speculation about who will succeed him at the top; however, his decision to extend his retirement age from work from 75 to 80 indicates he could be around for a while longer.

Arnault’s forte is balancing heritage with innovation to keep venerable brands from stagnating and give top designers the freedom to update classics. Louis Vuitton has increased its aura of exclusivity by multiplying bag styles through limited editions, with partners such as artist Jeff Koons, allowing shoppers to feel like they have something different from the rest — an approach Solca called a “multiple innovation engine” that keeps quantities limited and prices high.

“Mastering the paradox of star brands is very difficult and rare“Arnault once told Harvard Business Review, adding: “fortunately”.

“Our entire business is based on giving our artists and designers complete freedom to invent without limits.“, said. ““If you look down on a creative person, they will stop doing great work.”

In the strange world of luxury retail, rising prices can boost demand, not to mention profits, by underscoring the desirability of, say, a Louis Vuitton handbag that can cost $3,000 or more. The growing number of extremely wealthy people who can afford luxury items, and the company’s early move into China as it emerged as a major luxury market, have also boosted its fortunes.

Given the company’s emphasis on its French heritage, the Paris sponsorship is “quite consistent with the image of LVMH“says Qing Wang, professor of marketing and innovation at the University of Warwick Business School.With the Paris Olympics, it is an opportunity to highlight that connection.”

The modern Olympic Games were invented, after all, by a French nobleman, Baron Pierre de Coubertin, and French remains one of the official languages ​​of the Games.

“We feel a responsibility because our brands are distinctly French. We are French.“Antoine Arnault told AP.My father is deeply French and loves his country. So we feel a responsibility to, yes, do things the right way.”

The company’s €150 million ($162 million) financial contribution, a figure reported by media and analysts but not confirmed by the organizing committee or the company, would put LVMH at or near the top of the list of the Games’ biggest sponsors.

Sponsorship helps the organising committee achieve its stated goal of privately funded Games that avoid the cost overruns of previous Olympics. (The Games’ €4.38 billion budget is 96% covered by private revenues, including from sponsors, ticket sales and television revenues. Four per cent of public funding goes to subsequent Paralympic Games.)

There are risks to LVMH’s image investment if, for example, the Games are marred by protests in France’s volatile political climate.The French are considered world leaders in protest”, Solca points out. And it is an undeniable fact that, as Solca says, “Luxury thrives on income inequality”: While Macron has promoted the Games as wide open, critics have seized on the exclusivity of access to many events and the luxury brands intertwined.

One thing is fairly certain: Paris will not see a sudden surge in luxury shopping during the Olympics.

Crowds may deter wealthy travelers from coming to spend, and street closures will make it difficult to access shops, including Avenue Montaigne, where LVMH’s flagship store is located.

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