The Art of Slowing Down
132: Not Just a €1bn Branding Miss—A Masterclass in Corporate Complacency
“The three enemies of business success are arrogance, bureaucracy and complacency.”
-Michael Burke
If you recall back in May I highlighted an absolutely absurd statement from LVMH US’ CEO Anish Melwani.
Effective yesterday, July 7th, Anish was effectively demoted, and Michael Burke has been appointed chairman and CEO of LVMH Americas. He will take on a new leadership role tasked with advancing the group's interests across North and South America amid growing geopolitical complexity. He will also serve as non-executive chairman of Tiffany & Co.’s board, reflecting LVMH’s strategy to deepen its investment in the region, which accounts for approximately 25% of the group’s €84.7 billion revenue. Burke, a longtime confidant of Bernard Arnault, is credited with tripling Louis Vuitton’s revenues and quadrupling its profitability during his tenure (1992 – 1997 so 30+ years ago, however I’m sure the same playbook will work). Based in New York, he will oversee Anish Melwani (mentioned above) and Davide Marcovitch (Latin America).
As Mr. Burke is quoted above as saying, let’s get into what he needs to address in his new role starting with complacency.
It has been well documented that LVMH made an aggressive push into global sports through its $1 billion, 10-year sponsorship deal with Formula 1. They slapped the Louis Vuitton name on the Australian Grand Prix and inserting Tag Heuer and Moët & Chandon into F1’s ecosystem. The strategy aims to align sport with luxury’s core attributes: exclusivity, status, and price inflation. This weekend, however, at the British Grand Prix at Silverstone we witnessed one of the greatest marketing fuck ups in recent memory.
For €1bn it should be raining Moët at every Formula 1 weekend. Moët should be readily available in the Paddock Club, other hospitality etc. to the point where I do not want to see champagne again after a weekend. That has certainly not been the case and this past weekend at Silverstone highlights it.
When I was at the Monaco GP I noted that Moët was being used as a mixer in hospitality. Well at Silverstone, KICK Sauber driver Nico Hülkenberg earned his first podium in 239 starts. This is a major accomplishment for Hülkenberg along with the Sauber team and was to be celebrated accordingly. Unfortunately, the Sauber team did not have champagne stocked in their garage for the occasion. Now one would think that Moët would have a runner (or Intern) bring a few cases of Moët to the Sauber garage since there is plenty of time from the race finish to team celebrations and it’s only a few meters away.
In reality what actually occurred was that Mercedes (and Aston Martin) team members brought over LAURENT PERRIER champagne from their garages to Sauber so Sauber could celebrate.
A very valid question that now arises is “what the fuck is Alexandre Arnault doing over at Moët?” First of all, why is there any other brand of champagne anywhere near a team garage, Paddock Club etc. It’s so simple to ensure that each team has a few cases of Moët in their garage area prior to the start of each race. Additionally, this is a massive, missed marketing opportunity for Moët to have their brand all over tv and social media in an excellent moment of class and sportsmanship. Instead, Laurent Perrier is shining in the moment (it has millions of views on Instagram, X, TikTok etc.) and they didn’t have to pay €1bn.
This is a perfect illustration of complacency. It appears LVMH thought they can just pay €1bn and have their logo slapped on F1 and the rest would take care of itself. Unfortunately for Alexandre this is not how things work. If I were in his position I would be at every event (this is why they have corporate jets) overseeing my investment (since it’s a material one). I would have the relevant contact at each team and F1’s personal mobile in my phone to ensure product was stocked and placed properly. I would also work to partner with other activations, events etc. each weekend to ensure that our product was prominently displayed and address situations where it is not.
So where was Alexandre? According to my sources he was nowhere to be found and as far as I know hasn’t been at many of these F1 events with the exception of Monaco. It has nothing to do with liking or disliking the sport, however when your company has a €1bn marketing investment that you’re locked into you need to be hands on instead of being complacent and assuming things will take care of themselves.
On a separate note to this, if I were Alexandre, I would immediately let the following people go as this whole situation with Sauber is a colossal marketing fuck up:
· Carlo Braggio – Senior Project Manager F1 Partnership at Moët Hennessy
· Thibault Cocardon – Global Head of Partnerships & Influence at Moët Hennessy
· Steve Small – Head of Sponsorships, Partnerships & Corporate (UK) at Moët Hennessy
· Emmy Aoun Gestin – Chief Marketing Officer at Moët Hennessy
Moving on I am going to address arrogance and bureaucracy together given that as it relates to LVMH they are not mutually exclusive.
It is a tough argument to make that one can successfully run a €200m+ market cap company as