Jay-Z Sells Half of Ace of Spades Champagne Model to LVMH

When Jay-Z got on a video call last week with Philippe Schaus, the executive director of LVMH Moët Hennessy Louis Vuitton’s beverage business, the Zoom backgrounds told the story.

Jay-Z spoke of a partially covered patio of his Los Angeles home wearing a casual sweater that was outfitted by the outdoor living room and the greenery around him. Mr Schaus was in his office in Paris, wearing a suit with shelves of ornate beverage bottles behind it.

The subject: the news that LVMH would take over half of Armand de Brignac, Jay-Z’s bubbly brand. (Most people call it the ace of spades, after the bottle is branded.)

The deal gives Jay-Z the organizational support and sales force of what Mr Schaus put on a global beverage machine, while LVMH gains the cool clout and lifestyle marketing expertise of a black culture pacemaker at a time when the racism of the The luxury sector is particularly closely examined.

Neither side would disclose the financial terms of the transaction. But if Jay-Z’s writing can be viewed as adequate journalistic sourcing (it’s very likely it shouldn’t), Armand de Brignac valued half of it at $ 250 million in 2018. “I’m 50 percent from D’Ussé and it’s debt free, 100 percent from the ace of spades, worth half a B,” knocked Jay-Z on What’s Free, the Meek Mill route. (D’Ussé is the brand of cognac that Jay-Z owns with Bacardi.)

However, they were more than happy to talk about their new relationship.

“We’ve always tried to grow this brand,” said Jay-Z, “and it came naturally.”

Mr Schaus, who manages a champagne portfolio for Moët Hennessy, which includes Dom Pérignon and Krug, raved right back. “From your understanding of tomorrow’s world, you believe you have created a new champagne consumer,” he said, beaming at Jay-Z over the computer.

It’s not the most obvious time to invest in champagne amid a health pandemic that has kept bottle-service dance club partying to a minimum in a world with little to party. But then LVMH doesn’t just buy a new beverage brand: it buys cultural know-how and enters markets traditionally not served by some of its brands.

“We have to catch up somehow,” said Mr Schaus when he called Zoom. “This relationship will give us a better understanding of tomorrow’s market.”

LVMH first attempted access to “Tomorrow’s Market” in 2019 when it teamed up with Rihanna to create the high fashion line Fenty – and that happened also when it first met Jay-Z. (Rihanna is represented by the management of Roc Nation, Jay-Z’s entertainment and sports company.) Though the Rihanna line ceased operations less than two weeks ago, the champagne partnership signals a strengthening of larger ties with the larger Jay-Z -Universe.

The ace of spades deal was originally discussed in the summer of 2019 when Jay-Z hosted lunch at his home for Bernard Arnault, founder and chairman of LVMH, and Alexandre Arnault.

The younger Mr. Arnault is the third of five children of Bernard Arnault. At 28 he is an increasingly visible force at LVMH. In 2017, when he was only 24 years old, he became managing director of Rimowa, LVMH’s German luggage brand. was the family member who accompanied his father when President Trump severed the ribbon on a new Louis Vuitton factory in Texas; and was recently named executive vice president of product and communications for Tiffany, which LVMH acquired in a $ 15.8 billion deal last year.

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

LVMH’s investment, which has an all-white executive team, gives Jay-Z a heightened presence in an old European elite industry.

“The very idea of ​​this partnership is a signal for a more diverse perspective,” Jay-Z said of LVMH.

“We still have a long way to go,” said Mr Schaus.

Jay-Z’s cultural and business association with Champagne has been around for a long time. He had been a fan of Cristal and had helped make it an emerging brand among hip hop fans. But then, in 2006, an executive at Cristal’s parent company told The Economist about patronizing the rap world: “We can’t stop people from buying them. I’m sure Dom Pérignon or Krug would be happy with their deal, ”he said.

Jay-Z called for a boycott of Cristal and that same year bought Armand de Brignac with a partner. He renamed the Ace of Spades product, redesigned the bottles, and marketed it as a key element of the Jay-Z lifestyle with a reveal in the video “Show Me What You Got”. He kept the brand names alive in “We Made It Freestyle” from 2014, the year he bought the rest of the line.

Although Champagne as a company suffered during the pandemic, Jay-Z said the market has recovered from its initial sharp drop in revenue and shipments in 2020 and settled for a 20 percent deficit.

Both businessmen hope that the “super luxury” sector will be the first to recover, said Schaus. A bottle of Ace of Spades can save you anywhere from $ 300 to $ 64,999 on a 30-liter Midas bottle.

Wealthy people are least affected in the current climate, said Schaus, and “will enjoy their pride again and show what they are and what they have achieved.”

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