JAY-Z Sells part of Ace of Spades champagne Ownership to LVMH to boost production

The wine and spirits division of luxury group LVMH, Moet Hennessey announced on Monday that it bought 50% stake in Jay-Z’s champagne brand, Armand de Brignac which is nicknamed “Ace of Spades”.

The financial terms of the deal are yet to be disclosed.

Jay-Z first got involved with the champagne brand in 2006, buying 50% stake. He also debuted Armand de Brignac in his music video “Show Me What You Got” before its official launch later that year. In 2014, Jay-Z (known as Shawn Carter) bought the remaining 50% stake of Armand de Brignac, giving him full ownership of the brand.

Jay-Z told CNBC on Monday that talks about the deal started in 2019, “in a place of respect and built from there pretty quickly.

CEO of Moet Hennessey Philippe Schaus said that Armand de Brignac played a major role in bringing in new consumers to the champagne category.

“For years we have been following the fantastic success of Armand de Brignac and admiring their ability to challenge some of the rules of the champagne industry,” Schaus said. “What we could bring to the brand which is already very successful, is the sheer power of our international distribution network.”

Ace of Spades champagne brand sales report

The brand sold more than 500,000 in 2019, but sales dropped in 2020 due to the coronavirus pandemic which left most clubs and lounges closed for a better part of the year. Comite Interprofessionnel du Vin de Champagne, an industry trade group estimated that champagne sales fell $1.2 billion, or 18% last year.

The LVMH partnership deal comes at a time when the group is putting more effort into diversifying its clientele. For a long time, the luxury industry has often been criticized for lack of diversity and high-profile racist gaffes.

The luxury group recently unveiled tennis star Naomi Osaka as its latest brand ambassador. Osaka was commended during the US open for her support of the Black Lives Matter protest last summer. LVMH has also collaborated with skateboarder Lucian Clark, and a few years ago partnered with pop-star Rihanna’s Fenty House.

“LVMH is a brand that has quite a wide appeal. It serves lots of different markets,” Neil Saunders, retail industry analyst and managing director of GlobalData. He added that a diversified market portfolio will help LVMH reach “audiences that are very important, but perhaps have been traditionally underrepresented in luxury.”

Jay-Z said in a statement on Monday that LVMH’s experience in developing luxury brands and marketing expertise “will give Armand de Brignac the commercial power it needs to grow and flourish even further.”