Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Luxury brands pushed into the mass-market sports arena this year even as they shifted their broader business focus towards their wealthiest customers and away from the middle-class consumers who have turbocharged their growth over the past decade.
Traditionally more associated with the exclusive worlds of polo, sailing and tennis, luxury houses have piled into sports such as football and basketball, with the number of sponsorship and collaboration deals soaring to 96 in 2024, from 19 five years earlier, according to data group Luxurynsight.
LVMH’s sponsorship of Formula 1 was on full display this year at the Abu Dhabi Grand Prix in December, where the podium was emblazoned with Louis Vuitton logos and the track with that of champagne house Moët & Chandon.
The group’s biggest brand, Louis Vuitton, became a title partner for Monaco’s Grand Prix this month, and this summer announced a partnership with Spanish football club Real Madrid. LVMH’s next biggest brand, Dior, teased new artistic director Jonathan Anderson’s runway debut with images featuring Kylian Mbappé, one of the game’s biggest stars.
“Sports is the biggest stage there is, with the biggest audience. Of course, they want a piece of that, and I think they always will,” said a person familiar with the LVMH houses’ deals. “These brands don’t just sell products — they sell a lifestyle. Linking with top-tier sports franchises lets a lot of people see that in a context they relate to.”
Luxury brands in recent decades have gone from niche businesses servicing the super-rich to global corporations with billions in revenues, requiring a much wider customer base. LVMH, the world’s biggest luxury group, has been at the forefront of both the boom in scale and the tie-ins with sports.
“Today, luxury is no longer a luxury for VIP clients, but a democratised luxury,” said Jonathan Siboni, chief executive at Luxurynsight, adding that the size and maturity of top luxury brands meant they needed to address an ever larger customer base in order to grow. “Sports today is entertainment, and it’s on a global scale . . . Brands want some of that attention.”
But the push into mass-market sports comes even as luxury groups refocus on wealthier customers after years of inflation that have hurt the spending power of middle-class shoppers.
“The aspirational model is being deprioritised,” said Alexis Bonhomme of luxury consultancy Trinity Asia. “Growth is now fuelled by top-spending clientele, particularly in China and the US as the middle segment is being squeezed.”
Audience expansion, however, is what helped propel Louis Vuitton from a family-run business with a handful of stores in the 1970s to a global powerhouse with estimated annual sales of more than €22bn.
The question is how the category of mega brands that it leads, each with revenues of more than €10bn, can continue to grow, and how they manage the risks of brand dilution as they become more mainstream, including through alliances with the world’s biggest sports.
The Real Madrid alliance, in which Louis Vuitton will make formal and travel wear for the men’s and women’s squads, is the latest in a series of sports tie-ups involving LVMH. As well as sponsoring the Paris Olympics, the group is in the first year of an almost €1bn, decade-long deal with Formula 1 motor racing that will involve several of its brands including Louis Vuitton, drinks division Moët Hennessy and watchmaker Tag Heuer.
Meanwhile, Tiffany, the jeweller acquired by LVMH in 2021, has a long-standing relationship with the NBA, designing the league’s trophies and collaborating on lines of basketball shoes and jerseys.
Other luxury houses to have pushed into mainstream sports include Ralph Lauren, which dressed the US Olympic team for the 2024 Games, Prada, which is the official partner of the Chinese women’s football team and Moncler, which has made off-pitch clothing for Inter Milan.
Louis Vuitton’s deal with Real Madrid could “seem a bit aspirational and low-end to some, but to some it’s the dream and some of these players are the absolute stars”, said Erwan Rambourg at HSBC. He added that for such a large brand to keep growing “you have to try a lot of things to see what sticks”.
Within F1, the challenge is to stand out amid a sea of brands — from KitKat chocolate bars to Heineken beer — seeking to cash in on the sport’s growing resonance with Gen Z fans.
Tie-ups with sports work for luxury because they can be linked to narratives about craftsmanship and high performance, as is the case with Rolex and tennis or Louis Vuitton and Formula 1, according to Bonhomme.
“Done right, they don’t dilute luxury but reframe it in a modern context,” he added. “But scale is a risk . . . if the campaigns or products lack prestige.”
Additional reporting by Sam Agini