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Succession: Why LVMH leadership could hinge on the Paris Olympics
Sunday 11 August 2024, the day the Paris summer Olympic Games will close, is being billed by the organisers as the biggest event ever held in France. It may also prove to be pivotal in determining the future leadership of luxury goods empire LVMH.
It could also go down as the day on which effectively Antoine Arnauld becomes the crowned prince of LVMH, chosen to succeed his father Bernard at the top of Europe’s biggest company.
It has been widely speculated that Bernard has been putting his five children into key positions in his US$500 billion luxury goods empire, giving them each the chance to prove themselves both to him and to significant investors that they are ready to step into his shoes when he steps down.
Last year Arnault Pere changed the LVMH articles of association to allow him to remain in the driving seat until his 80th birthday. That is just over five years away but seemingly he wants to ensure a smooth transition for his chosen offspring, a transfer of power that could come before then if he chooses.
Antoine, the oldest son, is vice-chairman of the Christian Dior fashion division and oversees Moët Hennessy. In addition he is in overall command of burnishing the LVMH reputation as the world’s premier purveyor of luxury items from couture and luggage to fine wines, watches and jewellery.
And it is Antoine, 46, who is reportedly about to sign a €164 million deal to put LVMH at the heart of the Paris Olympics.
That sum is just 0.2% of LVMH’s 2022 turnover but make a success of the sponsorship and his hands would be firmly on the levers of power when his father steps aside.
Antoine Arnault recently told shareholders that the Paris Olympics “will be the most watched event in the history of television, in the history of the games – a spectacular event.”
That may be hyperbole – the Beijing Games suffered a viewer decline from Rio in 2016 – but TV is only one element of a media programme and the build up to the 2024 event will make Paris the centre of global attention for much of the year.
The Olympics will provide an unrivalled shop window for LVMH up to the opening on July 26 and during the 350,000 hours of scheduled TV broadcasts around the world the organisers predict.
The deal will not make LVMH a long-term “Olympic Partner”, the group of global giants such as McDonald’s, Coca-Cola and Procter & Gamble, who spend billions on their continuing associations with the International Olympic Committee.
But both the French organisers and the IOC want a French icon to be a figurehead sponsor of the Paris event.
Antoine, it is reported, sees the 16 days of competition as an unrivalled opportunity to further underline to global consumers LVMH’s role as the epitome of French craftmanship and heritage.
One of his problems will be promoting the Moët Hennessy wines and spirits division because of the 1991 Loi Evan, which prohibits advertising and promotion of alcohol on French television and in cinemas.
That includes advertising at sports grounds where broadcast events are taking place.
For that reason, in France the Heineken Cup European Club rugby union competition is known only as the H Cup. Guinness can use its sponsorship of the Six Nations rugby championship only by substituting “Greatness” for its name on ground logos in its iconic black and white and using the familiar typeface.
But French law does not preclude alcohol promotion at events broadcast outside France nor in social media campaigns.
According to insiders, Antione is intent on using the sponsorship to enhance the entire LVMH luxury portfolio “without excessive displays of brand logos that could cheapen the image”.
So while medal winners will not be seen celebrating with bottles of Moët, LVMH’s Champagne stable will undoubtedly be to the fore in venue hospitality suites for the rich, famous and potential big spenders.
And LVMH itself will seek to impress the same guests at Paris hotels and restaurants.
The emphasis will be on non-alcohol brands but Antoine Arnault is set to make Paris 2024 a driver for further growth of LVMH luxury.
Not only that, the group will undoubtedly extend its Olympic involvement to cash in on its €500 million contribution to the rebuilding of Paris’ Notre Dame cathedral five and a half years after it was ravaged by fire. The reopening is scheduled for December 2024.
Add to the prestige of LVMH and the desirability of its stable of 75 global brands in 2024 and Antoine will be pole position among the five siblings to eventually succeed his father.