Jay-Z and LVMH Pop the Cork in Champagne Tie-Up -- Update
February 22 2021 - 1:02PM
Dow Jones News
By Matthew Dalton
Jay-Z and LVMH Moët Hennessy Louis Vuitton SE are joining forces
in the Champagne business, further cementing the alliance between
the world of hip-hop and luxury as the Covid-19 pandemic saps sales
of the festive wine world-wide.
LVMH, the world's biggest producer of Champagne, has taken a 50%
stake in Armand de Brignac, the high-end Champagne brand owned by
Jay-Z, the rapper and mogul. The brand, one of the youngest in the
famed sparkling wine region, is known for its metallic bottles that
cost hundreds of dollars each.
The investment, LVMH and Jay-Z said, is aimed at growing Armand
de Brignac through LVMH's global distribution networks while
drawing upon the conglomerate's vast resources within Champagne
wine country. It comes at a difficult moment for Champagne: The
pandemic canceled weddings, soirees and other occasions to pop
corks, cutting sales of the wine by around 20% last year. The two
sides didn't disclose the value of the transaction.
"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," Jay-Z, born Shawn Carter, said in an interview.
"We'd been in this 15 years, not a hundred."
The partnership shows how European luxury brands are now
embracing Black recording artists and hip-hop culture to appeal to
a younger, more diverse clientele. Rihanna and LVMH launched a
cosmetics line, Fenty Beauty. The rapper Gucci Mane and his
namesake brand, the Italian fashion house Gucci, have collaborated
on a collection. Dior, an LVMH brand, has used the rapper A$AP
Rocky as a featured model in several menswear collections.
Streetwear has become a staple of luxury fashion.
"I think that people have come to accept that these two worlds
are a natural fit," Jay-Z said. "In the beginning, it wasn't a
natural fit."
Rappers have long peppered their lyrics with references to Dior,
Louis Vuitton, Dom Pérignon and other brands. But until recently,
the luxury industry kept its fans in hip-hop at a distance. One
such perceived snub pushed Jay-Z to invest in Armand de
Brignac.
Since emerging as a star in the 1990s, the Brooklyn-born rapper
had been a devotee of Cristal, repeatedly name-checking the
high-end Champagne brand in his rhymes. That changed when, in 2006,
an executive at Cristal's parent company was asked in The Economist
whether the brand would be harmed by its association with rap.
"That's a good question, but what can we do?" he replied.
Jay-Z soon organized a boycott of Cristal. Later in 2006, in the
video for the single "Show Me What You Got," he touted a new brand:
Armand de Brignac, which called itself "Ace of Spades" and was
launched earlier that year in the Champagne town of
Chigny-les-Roses. The brand quickly put out a press release
highlighting the mention.
Jay-Z was one of the early investors in Armand de Brignac, and
in 2014, he bought out his partner, the spirits company Sovereign
Brands. The Champagne brand is one of several businesses in the
rapper's portfolio, which also includes the talent agency Roc
Nation and D'Ussé Cognac. Last month, he announced the launch of a
fund to invest in minority-owned cannabis start-ups.
In Armand de Brignac, LVMH saw a label that was quickly drawing
new Champagne drinkers to the high-end segment of the market, said
Philippe Schaus, head of Moët Hennessy, LVMH's spirits division.
"The bottle has a much more modern and audacious design," Mr.
Schaus said. "The way it was distributed -- very much by word of
mouth. Jay-Z wasn't really apparent, but you were feeling that
something was happening behind the scenes, which was making the
brand work in a different way from other brands."
Armand de Brignac has been produced by a small team inside the
Cattier Champagne house, a family-run brand. Mr. Schaus said LVMH's
resources in Champagne -- it owns about 4,000 acres of vineyards in
the territory -- would likely be tapped to boost the brand's
volumes in the years to come.
The deal arose from discussions started between Jay-Z and
Alexandre Arnault, the 28-year-old son of French billionaire
Bernard Arnault, LVMH's chief executive and controlling
shareholder. Jay-Z said he first met Alexandre a number of years
ago in Paris on a trip with Kanye West. The deal advanced further
after Bernard and Alexandre Arnault and Mr. Schaus met with Jay-Z
several times at his home in Los Angeles, most recently this
summer.
Jay-Z said he expects to collaborate with LVMH on other projects
in the future. The allure of luxury for rappers, he said, comes
from the desire to celebrate after surviving the despair of the
inner city.
"If you put yourself in the shoes of people who come from these
neighborhoods, you can understand why someone who -- five of their
six friends have passed away -- would want to celebrate life,"
Jay-Z said. "We're connecting with things that are well made, and
things that survive."
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
February 22, 2021 12:47 ET (17:47 GMT)
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