The importance of due diligence: lessons from the Paris 2024 Olympics & Le Coq Sportif

By Pascal Guignard

As the world prepares for the Paris 2024 Olympics, attention is not just on the athletes but also on the partnerships powering the event. One partnership currently under scrutiny is between Airesis, a Swiss investment firm and majority owner of Le Coq Sportif, and the Paris 2024 organising committee. This situation highlights the importance of knowing your partners and their financial health before forming crucial agreements.

Airesis holds a significant stake in Le Coq Sportif, a historic French sportswear brand. Le Coq Sportif has been chosen as the official outfitter for the Paris 2024 Olympics. The brand is responsible for designing and providing uniforms for the French Olympic team, referees, volunteers, and merchandise, totalling over 200,000 pieces. This high-visibility assignment presents both opportunities and challenges.

The financial stability of Airesis, and by extension Le Coq Sportif, is critical to meeting the demands of their Olympic partnership. Recent reports have raised concerns about Airesis’ financial health, casting a shadow over Le Coq Sportif, which has delivered only a fraction of its orders with just over a month to the opening ceremony. The financial health of a parent company can significantly impact its subsidiaries, affecting everything from cash flow to production capabilities.

For the Paris 2024 organising committee, these financial concerns are significant. Any disruption, such as production delays or quality issues, could damage the reputations of both Le Coq Sportif and Paris 2024. Le Coq Sportif reported a financial loss of €34 million for 2023, Airesis delayed publishing their annual accounts twice, and the Zurich stock exchange suspended trading of their shares.

This situation underscores the importance of thorough due diligence when selecting partners, especially for high-stakes events like the Summer Olympic Games. Many companies regularly face their own high-stakes deals, partnerships, or contracts. Like the Olympic organising committees, these companies must rigorously assess the financial stability and operational capacity of their future partners using:

1.  Financial Audits: Regular financial audits to ensure partners can fulfil obligations.
2.  Contingency Plans: Plans in case a partner fails, ensuring alternative solutions.
3.  Transparency: Clear communication to manage risks proactively.
4.  Background Checks: Thorough checks on the company, its structure, and management.

The dynamics between Airesis, Le Coq Sportif, and Paris 2024 offer valuable lessons for future partnerships:

1. Holistic Evaluation: Assess partners on financial stability and delivery capacity.
2. Long-term Viability: Consider long-term viability to avoid disruptions.
3. Collaborative Oversight: Ensure transparency about financial health and challenges.

This partnership highlights the complexities of high-profile collaborations. It serves as a reminder of the importance of knowing your partners well. Financial health is not just a balance sheet metric; it’s essential for reliable partnerships. For events like the Olympics, ensuring the financial robustness of every partner involved is crucial.

Conflict International can assist in situations like this by providing comprehensive due diligence services. We offer:

1. Asset, Background, and Due Diligence Checks: Ensuring you have all the necessary information before making decisions.
2. Risk Advisory: Including proactive risk management strategies.
3. Bespoke Investigations: Tailored investigations to meet your specific needs and help you reach the right decision.
4. Expert Consultation: Access to a team of experts who can provide insights and advice on managing complex partnerships and mitigating risks.

By leveraging Conflict International’s expertise, companies can navigate high-stakes partnerships with confidence. We provide a thorough approach that combines detailed due diligence with ongoing support, ensuring that all parties involved are reliable, financially sound, and aligned with your strategic goals. For more information, contact us.