LVMH to acquire half of Armand de Brignac, the champagne line from Jay-Z known as Ace of Spades

When Jay-Z clicked on a video call last week with Philippe Schaus, CEO of LVMH Moët Hennessy Louis Vuitton, Zoom’s track record told the story

Jay-Z spoke from a partially covered patio at his Los Angeles home, wearing a casual sweater, accessorized by the outdoor lounge and greenery around him Mr. Schaus was in his office in Paris, dressed in a suit, accessorized by shelves of elaborate drink bottles behind it

The subject: the news that LVMH would buy half of Armand de Brignac, the sparkling brand of Jay-Z (Most people call it Ace of Spades, after the brand of its bottle)

The deal gives Jay-Z the organizational support and distributing power of a global beverage ‘machine’, like Mr. Schaus called it, while LVMH gets the cool influence and lifestyle marketing know-how of a black cultural leader at a time when luxury industry racism is under special scrutiny.

Neither side disclosed the financial terms of the deal But while Jay-Z’s words can be considered proper journalistic sourcing (it is very likely they shouldn’t be), the half of Armand de Brignac was valued in 2018 at $ 250 million “I’m 50% D’Ussé and I’m debt free, 100% Ace of Spades, worth a half-B,” Jay-Z hit on “What’s Free,” the Meek Mill track (D’Ussé is the brand of cognac that Jay-Z owns with Bacardi)

Monsieur Schaus, who manages a Champagne portfolio for Moët Hennessy which includes Dom Pérignon and Krug, gushed back “In your understanding of the world of tomorrow, we believe that you have created a new consumer for Champagne”, a he said, beaming at Jay-Z through the computer

Now is not the most obvious time to invest in Champagne, amid a health pandemic that has kept the party of dance clubs with bottle service to a minimum in a world with little to celebrate But then, LVMH is not just buying a new brand of drinks: it is buying cultural know-how and entering markets that are not traditionally served by some of its brands.

“We have to catch up one way or another,” said M Schaus on the Zoom call “This relationship will therefore allow us to better understand the market of tomorrow”

LVMH first attempted to enter the ‘market of tomorrow’ in 2019 by partnering with Rihanna to create the Fenty haute couture line – which was also, in this case, when it was first meeting with Jay-Z (Rihanna is represented by the management of Roc Nation, Jay-Z’s entertainment and sports company Although Rihanna’s line operations were suspended less than two weeks ago, the partnership with Champagne signals a strengthening of wider ties with the great universe of Jay-Z

The Ace of Spades deal was initially discussed in the summer of 2019, when Jay-Z hosted a lunch at his home for Bernard Arnault, founder and chairman of LVMH, and Alexandre Arnault

The youngest M Arnault is the third of Bernard Arnault’s five children. At 28, he is an increasingly visible force at LVMH He became Managing Director of Rimowa, the German luggage brand belonging to LVMH, in 2017 at just 24 years old; was the family member accompanying his father when President Trump cut the ribbon on a new Louis Vuitton factory in Texas; and was recently appointed executive vice president of products and communications at Tiffany, which LVMH acquired at $ 15.8 billion in transactions last year

He and Jay-Z are good friends who talk on the phone once a month or so “I’ll send him a pic of something going on with me or he’ll send me a pic,” Jay-Z said “It’s super natural, super cool I consider him a person of great integrity Always keeps his word, very punctual These are some of the qualities that I have myself”

The investment from LVMH, which has an all-white management team, gives Jay-Z an increased presence in a former elite European industry

“The whole idea of ​​this partnership is a sign of a more diverse way of looking at things,” Jay-Z said of LVMH

Jay-Z’s cultural and business connection to Champagne goes back a long way He was a fan of Cristal, helping to make it an ambitious brand among hip-hop fans But then, in 2006, a parent company executive de Cristal commented to The Economist about the patronage of the rap world: “We can’t stop people from buying it. I’m sure Dom Pérignon or Krug would be delighted to have their business, “he said

Jay-Z called for a boycott of Cristal and in the same year he bought Armand de Brignac with a partner He renamed the product Ace of Spades, redesigned the bottles and marketed it as a key part of the style of life Jay-Z, with a revelation in the video “Show Me What You Got” He kept the brand’s mentions alive in 2014 “We Made It Freestyle”, the year he bought the rest of the line

Although champagne as a business suffered during the pandemic, Jay-Z said the market had recovered from its initial sharp decline in revenue and shipments in 2020 and stabilized at a deficit by 20%

The two businessmen hope that the “super luxury” sector will be the first to recover, said M Schaus A bottle of Ace of Spades can cost you between $ 300 and $ 64,999, for a 30 liter Midas bottle

Wealthy people have been the least affected in the current climate, M Schaus said, and “will return to appreciate and show pride for who they are and what they have accomplished”


News from around the world – United States – Jay-Z and LVMH, two of the world’s biggest brands, go into business