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Jul 17 2007 12:00am EDT

Too Pretentious for the Cup

Louis Vuitton thinks the America's Cup has gone too mainstream. Is the pot calling the kettle commercial?

After 25 years of sponsoring the America's Cup, Louis Vuitton has decided to discontinue its support of the sailing world's most prestigious and famous regatta beginning next year.

The beef: the luxury house can't seem to agree with the current holders of the Cup, who are entitled to decide the when/where/how of the next race, on just what the tone of the event should be heading into the future.

The Swiss team Alinghi has been working to dust off some of the event's old-fashioned pretension, gradually modernizing and commercializing the regatta ever since it brought the Cup back to Europe in 2003.

Meanwhile, Louis Vuitton has turned up its nose at Alinghi's more populist changes to the Cup's personality. The subsidiary of the retail conglomerate LVMH is keen on maintaining the focus on the luxury and exclusivity that appeals to its super-rich target audience.

The America's Cup is a head-to-head sailing race between the current holder of the Cup and its leading challenger. In addition to laying out tens of millions of dollars for the race itself, Louis Vuitton also sponsors the Louis Vuitton Cup, which is the final qualifying event for the America's Cup race. Its decision to pull support leaves a major gap in the financing of the entire competitive series.

Ironically, Louis Vuitton has had its own share of criticism from the fashion industry about turning overly commercial. Thanks to consumers' "trading up" behavior and a steady expansion of global wealth, Louis Vuitton currently makes most of its money on leather goods and smaller ticket items like sunglasses rather big-ticket purchases from the super wealthy. That's a contrast to the brand's origins as a super-expensive couturier, accessible only to an elite band of consumers.

Of course, the luxury goods maker has seen more financial success than many of its rivals, and that is largely due to a powerful marketing engine that attracts aspirational buyers with precisely this level of pretension.

No word yet on what this news will do to the resale value of those $590 Louis Vuitton Cup loafers in your closet or the $1,560 Louis Vuitton Cup duffel bag that's collecting dust in your gym locker.

The mainstreamers on eBay haven't put anything up for sale.


by Liz Gunnison


Laura Rich is a co-founder of Recessionwire, which provides news, advice, perspective and humor about the recession and the recovery.

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