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Why are luxury companies such as Prada and Burberry venturing into sports?

Luxury brands are growing more prominent in the realm of sports sponsorship.

Last month, Prada announced a partnership with the Chinese women’s soccer squad for this summer’s FIFA Women’s World Cup.

 Able Made, a soccer-inspired lifestyle business, collaborated with luxury fashion house Burberry to launch a soccer gear range made from repurposed Burberry textiles. Meanwhile, the luxury company LVMH just announced that it will sponsor the Olympic Games in Paris next year.

 

For many years, athletic brands such as Nike and Adidas were among the most dominant retail brands in sports. Luxury brands appear to seek a piece of the lucrative sports sector. While luxury brands and traditional athletic brands can coexist in the same market, experts believe luxury brands have a better chance of capturing market share.

“It shows how important sports are to retail in the world today,” said Matt Powell, an advisor at retail consultancy Spurwink River. “It receives a tremendous amount of media attention as well as personal attention from consumers.” So I believe there is an awareness that there is a potential to capitalize on that desire and bring those individuals to their brands.”

 

Indeed, these games, particularly significant sporting events, draw a large audience. Euromonitor International, for example, expects that 2 billion viewers will watch the 2023 Women’s World Cup, more than doubling the number that watched in 2019. 

According to Powell, by extending their presence in sports, luxury companies acquire international attention, which can be advantageous if they are targeting a certain market. For years, Prada has tried to expand its business in China by opening pop-up stores and hiring Chinese actresses as ambassadors, where many luxury companies appear to thrive. When the Italian design house announced its collaboration with the Chinese soccer club, a photo of the team in tailored suits was seen over 300 million times on the microblogging site Weibo.

 

It’s no surprise that the 2024 Olympic Games in Paris, which LVMH is sponsoring, will have a global audience as well. The event is expected to draw 9.7 million attendees, making it the largest event ever held in Paris. The medals will be designed by LVMH’s premium jewelry and watch business Chaumet, and the hospitality program will include wines and spirits from Mot Hennessy. The company also supports certain sportsmen, such as French swimmer Léon Marchand. Nike has partnered with the US Olympic Committee since 2005, as opposed to LVMH’s fresh relationships. 

 

While luxury labels are dabbling in sports, Powell does not see them releasing performance clothes. “I don’t see luxury brands competing on the performance side of it,” he says. “I believe they will compete for the mindshare side of it.” So, and it is most likely more significant to them.”

Although analysts believe that luxury companies are unlikely to release their own cleats or dri-fit shirts, there is a chance for them to collaborate with players off the field. Able Made’s most recent collaboration with Burberry includes hoodies, joggers, and jackets – athleisure wear goods dominated by Nike and Adidas. 

 

“Athleisure has moved upscale in the last few years,” said Matt Moorut, Gartner’s director analyst. “That kind of experimentation definitely helps luxury brands reposition themselves for that younger audience.”

Aside from the games, luxury companies have the opportunity to collaborate with athletes at sports-related events such as the annual NBA draft. Indochino CEO Drew Green told Glossy that the company outfitted nine athletes for the tournament. During the drafts, brands such as Gucci and Dolce & Gabbana have a big presence. 

 

Entering the sporting arena, on the other hand, is a difficult endeavor. Luxury brands, unlike traditional athletic companies, may lack the knowledge or data to identify the athletes or teams with the most promise, according to experts. By supporting teams or organizations rather than individuals, luxury companies risk linking themselves with people who do not share their beliefs. 

“With teams, it can be a little more difficult because there are just more people involved,” Moorut explained. “You can’t always control how those ambassadors for you act, and that carries risks in and of itself.”

 

However, analysts believe that the opportunity to reach new and younger clients through sports is too excellent for brands to pass up. “I think we’ll see the same thing here as we saw more and more luxury brands getting into the sneaker space a few years ago,” Spurwink River’s Powell predicted. 

 

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