LVMH’s visibility will beam its brands to viewers around the globe. They may not be in the market for a bag or wallet today, but when they are, they will remember the trays in Louis Vuitton’s signature Damier check pattern on which medals were presented to winners.

What’s more, the involvement underlines that LVMH is more than just a seller of physical goods. Arnault said two years ago that Louis Vuitton was “not just a fashion brand”, but a “cultural brand”. The Neverfull bag maker’s chief executive, Pietro Beccari, told the Financial Times in May that there was “no household in the world that doesn’t have [contact with] Louis Vuitton products”.

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This might be hyperbole, but he’s not too far off. Appointing first Virgil Abloh, and then Pharrell Williams, as the house’s menswear creative director connected it to music and associated subcultures, such as streetwear. The Olympics will fuse it to sport. A campaign earlier this year for Louis Vuitton’s Christopher backpack featured tennis rivals Roger Federer and Rafael Nadal scaling the summit of Italy’s Dolomites.

Welcoming the world to Paris plays into another of Arnault’s strategies: moving further into hospitality. The theory is that when Chinese travellers do return to Europe in significant numbers, they won’t just be wearing the company’s clothes, shoes and jewellery, they will be able to vacation in an LVMH-controlled ecosystem, spanning hotels and restaurants. LVMH’s recent purchase of old school Paris bistro Chez l’Ami Louis, as well as reports that Arnault is among the bidders for Venice’s Hotel Bauer, underline the intent.

However, LVMH’s Olympic sponsorship must run smoothly. It’s not yet clear what flavour of government will emerge in France, and consequently what policies affecting luxury groups might result. The hope is that given the importance of the Games to Paris, politics will take a back seat to spectacle. But this can’t be guaranteed.

Meanwhile, US competition authorities are eyeing the luxury goods market, probing Tapestry Inc’s $US8.5 billion takeover bid for rival Capri Holdings. The deal between Saks Fifth Avenue and Neiman Marcus may put the industry under further scrutiny. This matters because LVMH hasn’t finished shopping. As well as hospitality, it has room to expand in watches and jewellery, with Arnault taking a personal equity stake in Cartier owner Cie Financiere Richemont.

Finally, some consumers have begun to baulk at the rising costs of upmarket items, while allegations of poor working conditions in factories making Dior bags in Italy risk a broader backlash.

Despite being the third-richest man in the world, Arnault likes to get his money’s worth, as his haggling over the price of Tiffany & Co four years ago demonstrated. That investment has paid off handsomely. He will be hoping for a similarly sparkling return from going for gold at the first Luxury Olympics.

Bloomberg

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