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Luxury brands explore crypto payments to attract new

wealth

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Printemps partners with Binance, Lyzi for crypto payments

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Expected regulatory support boosts crypto's appeal despite

volatility

By Mimosa Spencer

PARIS, Dec 18 (Reuters) -

Bitcoin's soaring value has caught the attention of high-end

fashion brands and retailers, prompting further interest in

offering cryptocurrencies as a means of payment to tap in to

fresh pockets of wealth and build loyalty with crypto

investors.

Until recently, only a handful of luxury brands including

LVMH watch labels Hublot and Tag Heuer as well as

Kering-owned fashion brands Gucci and Balenciaga have

experimented with crypto payment offers.

In recent weeks, upscale French luxury department store

Printemps announced it was teaming up with the world's largest

crypto exchange, Binance, and French financial tech company Lyzi

to accept cryptocurrencies including bitcoin and ethereum in its

stores in France - becoming the first European department store

to do so. The move, coming as bitcoin rises, has been noticed by

other brands and retailers who are showing interest in joining

in.

"There have been quite a few calls - it's generated

interest," said David Princay, president of Binance France, who

said the company is in talks with other luxury labels.

Luxury lighter and pen maker S.T. Dupont told Reuters it

aims to accept cryptocurrency payments in two Paris stores

before the holidays.

In the realm of experiences, cruise company Virgin Voyages

began this month offering its first product accepting bitcoin as

a payment option - a $120,000 annual pass for up to a year of

sailing on its cruise ships.

Regulators have long warned that cryptocurrencies like

bitcoin are high-risk assets, with limited uses in the real

world. High volatility has been another barrier to wide adoption

as a means of payment.

But pledges of support from U.S. President-elect Donald Trump,

who is expected to bring in more friendly e-currency regulation,

have fueled record-breaking rises for bitcoin. S&P analysts say

the narrative is starting to shift, noting that blockchain

innovation in financial markets could increase predictability

for cryptocurrencies.

SEEKING INNOVATIVE BRANDING

Luxury labels have long sought to cater to affluent shoppers

from the tech industry by opening stores in upscale Silicon

Valley malls and issuing products like the Hermes

Apple Watch, for example, which combines signature, stitched

leather straps of the French Birkin bag maker with tech giant

Apple's ( AAPL ) connected timepiece.

Now, new wealth generated by bitcoin's recent highs - topping

$107,000 on Monday - comes as the luxury industry faces its

biggest slump in years and searches for new sources of growth.

Offering cryptocurrency payments can be a way for companies

to brand themselves as innovative rather than "a stuffy old

brand that's only selling to the boomers," said Andrew O'Neill,

digital assets lead analyst at S&P Global Ratings.

The payment option remains largely symbolic. Retailers

usually reconvert the funds to euros or dollars to offset risks

of volatility, while for most shoppers, payment methods are seen

overall as "something that's been solved" already by such

transaction platforms as PayPal ( PYPL ) or Venmo, said

O'Neill.

But for bitcoin investors who have seen a strong rise in the

value of their investment, luxury goods - a designer handbag or

high-end watch - are an obvious choice for diversifying one's

portfolio, analysts say.

In a sign of growing interest from designer labels,

Balenciaga recently issued a leather card holder designed to

hold "Stax" hardware from crypto wallet company Ledger. The

black leather accessory, which retails for 350 euros ($368),

includes a keychain and Eiffel Tower charm, and an NFC chip

fitted underneath the brand logo. Ledger's Stax Crypto hardware,

its recently developed higher-end hardware with a curved touch

screen, sells for $399 at Best Buy ( BBY ) . The company's

"Flex" hardware, which resembles a mini Amazon Kindle, sells for

$249 while the "Nano" version, which looks like a USB key, sells

for $79.

REACHING YOUNGER CLIENTELE

Gregory Boutte, chief client and digital officer for luxury

conglomerate Kering, has described the group's strategy when it

comes to technology as "test and learn" rather than "wait and

see." He emphasized the embrace of new technologies as key to

reaching younger and Asian clientele.

Kering's star label, Gucci, has since 2022 made purchases

available through 10 cryptocurrencies for most of its products

in the United States.

Printemps is working to expand its crypto payments service

to New York City, where it plans to open a multibrand retailer

in the Wall Street district in March.

Bitcoin's rise in late 2021 prompted an initial flurry of

interest from luxury brands with Tag Heuer, headed at the time

by LVMH luxury scion Frederic Arnault, as well as Gucci,

accepting payments in cryptocurrency the following year for some

purchases in the United States.

One crypto advocate who recently used digital assets to make

luxury purchases is Eunice Wong, an investor and influencer

known as "Eunicorn."

Wong said she used cryptocurrency to buy several

high-end watches this year including an Audemars Piguet Royal

Oak model. But she is not interested in being drawn in by high

end brands seeking to build a closer client relationship,

preferring to bypass traditional retail stores and sales

routines. That takes too much time, in her view. "If I will buy,

I'll buy on the secondary market, not through them," she told

Reuters. "I want it now."