Yves Carcelle does not bother with false modesty. The chief executive of Louis Vuitton describes the leading leather and luxury goods group – part of the French LVMH fashion group – as “quite a special company”. So special that it does almost everything in-house, never holds any sales, never engages in licensing and never sells through duty-free shops.
The strategy has so far paid handsome dividends. According to a survey published in the Financial Times last month, Louis Vuitton is now the world’s most valuable luxury brand.
The partnership between Louis Vuitton and the America’s Cup, which began in 1983, was, therefore, “a love affair ready to happen,” Mr Carcelle says. The Louis Vuitton Cup has since been awarded to the winner of the race series that determines who will challenge the holder of the America’s Cup for their title.
It has never been a simple exercise in sports sponsorship, Mr Carcelle says. “We have… sought to play our institutional role as a partner, to try to make the world discover the saga of the Cup.”
Nevertheless, Louis Vuitton, whose only other involvement in sport is sponsoring classic car rallies, has clearly reaped many benefits – some obvious in terms of image and extensive worldwide press coverage – making the investment worthwhile. The price, Mr Carcelle readily admits, is high and keeps rising, but he prefers not to disclose exactly how much Louis Vuitton spends on the competition.
Among the less obvious benefits are the exposure of the venerable old brand to new technologies, and the impetus to make advances. “We have always used the Cup as a lab for new ideas,” Mr Carcelle says. For example, in the 1990s, it led to the company’s first experiments with the internet. The new medium enabled sailing enthusiasts to watch live coverage of all the Louis Vuitton Cup racing.
The high-tech nature of the competition has also given Louis Vuitton the excuse to test new materials for its luxury goods, and to develop a new platform for its high-quality Swiss watch manufacturing business. The company is now the Cup’s official timekeeper.
Swiss rivals did not particularly welcome its move into watches. Indeed, Rolex tried to unseat Louis Vuitton in the run-up to the 32nd competition, largely because the defending champion and organiser was also Swiss.
As well as leather goods and accessories tied to the Cup, Louis Vuitton has since developed a new line of high-tech sunglasses that are light enough to float on water, and a pen that floats and writes underwater.
In Valencia, it has not only reconstructed its permanent store in the city centre but also opened a stylish temporary one in the Port America’s Cup, the revamped inner harbour where the teams and all the related competition and hospitality activities are centred. Mr Carcelle expects this store to do brisk business throughout the event.
Yet in spite of all these benefits, Louis Vuitton and LVMH have shown misgivings over the way the competition, once arcane and very exclusive, has been changing into a mass-market commercial enterprise. Mr Carcelle prefers not to be drawn on the issue. He does, however, suggest that he is uncomfortable with the idea of making the competition the Formula One of sailing.
“We still see it as a saga and not a mainstream sporting event,” he says. Its charm, he suggests, is down to “people who have already made their fortunes and reputations devoting three years of their lives to try to win perhaps the ugliest silver cup ever made, in a competition where the rules are so complicated no one really understands them.”
With Cup organisers keen to make the competition less arcane and more accessible, it seems their relationship with their chief sponsor will also have to be transformed.
Paul Betts is the FT’s European business correspondent based in Paris
