Armand de Brignac/Moët Hennessy
In the early 2000s, Cristal Champagne was a staple in rap culture. Jay-Z in particular was a major influencer for the brand, often lavishly including it in videos, incorporating it into lines of hit songs, and helping make it a symbol of luxury.
In 2006, The Economist did an interview with Frederic Rouzard who was a managing director for the company who made Cristal. When asked if the association with rap music could hurt the luxury brand he responded, “What can we do, we can’t forbid people from buying it.” After backlash, Rouzaud issued a statement trying to clear up his comments but not before Jay-Z and other rappers began to boycott the brand.
Knowing that hip hop culture needed a new champagne to rally behind, Jay-Z decided to get into the liquor business. He then began a partnership with Armand de Brignac and bought 50% of the brand.
After his acquisition, Jay-Z began promoting the champagne and even featured Ace of Spades bottles in his “Show Me What You Got” music video. The brand slowly began to rise in popularity and grew over time.
A few years after the partnership, Jay-Z bought the remaining 50% of the brand and became the first rapper to fully own a luxury champagne brand. The brand reached its peak in 2019 when it sold more than 500,000 bottles. When a bottle of Ace of Spades can sell for anywhere between $300 to $50k, that is a ton of revenue.
In recent days, Jay-Z has continued to grow the Ace of Spades brand by selling 50% of the brand to LVHM Moët Hennessy. The amount of the sell has not yet been disclosed but the Ace of Spades brand has been valued at half a billion dollars making 50% of the company worth an estimated $250 million dollars.
LVHM is the world’s largest luxury goods conglomerate, known for owning brands like Louis Vuitton, Givenchy, Tiffany and Co., and Dom Perignon. The Ace of Spades deal gives Jay-Z the organizational support and international distribution powers of LVHM.
In return, LVHM will get access to the marketing and affiliation with a leader of black culture in a time where their brand is under racial scrutiny.
It will be interesting to see how the merger will benefit both brands. With the pandemic making the club and party scenes not as profitable, people are not buying as much luxury liquor in these settings. I don’t think however this will hurt the partnership as both LVHM and Jay-Z are known to be brands that can stand the test of time and this partnership looks to set them both up for even more continued success.
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