There’s nothing quite like the chaos and glamor of a Formula 1 track moments before the race kicks off. A-listers from music, fashion, and film swarm the track, all trying to get that perfect shot of the drivers and their rocket-like cars—think Brad Pitt, Serena Williams, and Rihanna casually mingling. Meanwhile, influencers dart around, juggling selfies and brand shoutouts like they’re racing too. 

But it’s not every day that the luxury world and the high-octane thrill of racing cross paths quite like this, so when they do, you know something big is going down. Case in point: LVMH, the parent company of Louis Vuitton and a handful of other iconic luxe brands like Moët & Chandon and Tiffany & Co. has struck a $1 billion deal with Formula 1 to replace Rolex as the main sponsor.

The move comes as LVMH tries to rev its engine back into the fast lane after publishing its first-half earnings for 2024, which showed some serious declines in sales. Their stock is down 7% so far this year, but the luxury giant is clearly banking on Formula 1’s global fanbase and cultural clout to give its revenue the turbo boost it desperately needs.

Why would LVMH, a company known for making boujee products you can’t afford (but desperately want), dive into Formula 1? Well, it’s more than just a flex. LVMH has been hurting—their first-half earnings report for 2024 was a bit of a downer. They saw declines in multiple key areas: wines and spirits revenue down 12%, fashion and leather goods took a 2% dip, and even the shiny world of watches and jewelry dropped 5%. In a luxury market that’s been a bit sluggish, the move seems like an attempt to shift gears and bring back the sparkle.

If you’ve been anywhere near a TV or Netflix, you know Formula 1 has exploded in popularity. Since U.S. based Liberty Media took the wheel in 2017 for a massive $8 billion, the sport has gone global and doubled in value. Just in 2024, Formula 1 pulled in close to $1 billion—up 36.5% from last year and their stock is up 24% YTD. We can thank Netflix’s Drive to Survive for bringing in legions of new fans. 

But, Formula 1 isn’t just for gearheads anymore; it’s got a 40% female audience now, which is music to LVMH’s ears. New fans, especially women, are a luxury brand’s dream audience.

And this isn’t LVMH’s first pit stop in the world of F1. Moët & Chandon used to be the champagne getting sprayed all over the podium, and Tiffany & Co. has been making the trophies for years. But this new 10-year partnership is next level. LVMH isn’t just slapping their logos on race cars—they’re going all in, with plans for exclusive product releases and luxe VIP hospitality experiences. 

The partnership officially kicks off in 2025, just in time for the new F1 season, and though the exact details are still hush-hush, insiders are estimating LVMH will drop about $100 million annually. That’s a billion-dollar bet over the next decade—but if it pays off, it could be exactly what LVMH needs to regain its swagger.

For LVMH, this is more than just a flashy deal—it’s their ticket to get back on top. The luxury market may have slowed down, but F1 is the fastest growing sport in the world. By aligning with a sport that’s only getting hotter, LVMH hopes to attract a younger, more diverse crowd and remind everyone why they’re the king of luxury.

Stock.News has positions in Netflix and Formula 1 as mentioned in the article.