LVMH and Jay-Z’s Champagne Partnership

Reasons to Celebrate

French luxury goods conglomerate LVMH (LVMUY) and rapper and businessman Jay-Z are working together in the champagne business. LVMH has purchased a 50% stake in Jay-Z’s champagne brand, Armand de Brignac. Financial details of the deal have not yet been disclosed.

The deal has advantages for both parties. LVMH, which is currently the largest champagne producer in the world, will be able to build a relationship with younger, more diverse consumers. Armand de Brignac, which is famous for its metallic bottles which cost hundreds of dollars each, will be able to take advantage of LVMH’s global distribution networks.

Champagne Problems

Champagne sales have fizzled over the past year because fewer weddings and other celebrations have taken place. LVMH, which owns a number of famous Champagne brands including Veuve Clicquot and Dom Pérignon saw sales of the wine drop 20%.

Meanwhile Jay-Z’s brand has seen growth. In discussing the deal with LVMH, Jay-Z, born Shawn Carter, said, “We were working really hard to maintain a brand that was growing faster than the staff we had and bigger than some of the expertise we had. We’d been in this 15 years, not a hundred.”

A Growing Trend

In addition to Jay-Z’s deal with LVMH, there have been a number of other collaborations between recording artists and the luxury goods industry recently. For example, rapper Gucci Mane and the Italian fashion company Gucci have created a collection together. Rapper A$AP Rocky has been a model for Dior, which is owned by LVMH.

Rihanna launched a number of brands with LVMH in recent years. Her Fenty fashion label was recently discontinued, but she is still partnering with LVMH for her Savage X Fenty lingerie line and two cosmetics lines. Jay-Z says he hopes to partner with LVMH on other luxury goods products in the future.

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