Just weeks ago the world of bling and posh frocks clung to hopes for a soft landing. A crash now looks more likely. Sales at Richemont, owner of Cartier, rose 16 per cent year on year in constant currency terms in the half-year to September 30, but fell 2 per cent in October. Burberry’s like-for-like sales also turned negative last month. Bulgari has issued a profit warning, the first among luxury brands, while Saks, Neiman Marcus and Nordstrom, top-end US department stores,have all seen double-digit sales declines.

Bain & Co now forecasts that luxury goods sales will fall by as much as 7 per cent next year. Some worst-case forecasts see 2009 sales in developed markets reverting to 2005-06 levels.

Where past recessions hit the toiling masses harder, the rich are this time sharing the pain. Even more corrosive than numerical falls in wealthy consumers’ property and portfolio values is the psychological impact. No one feels much like spending; ostentation is out.

Emerging market sales – source of about four-fifths of luxury brands’ growth – are also dropping. Growth is slowing in China. Russia’s oligarchs are worth $250bn less than a few months ago, while India’s top 40 Bollygarchs have lost $212bn – or 60 per cent of their combined wealth – over the past year.

One saving grace for luxury merchants is the dollar’s rebound against the euro and yen, which may flatter reported figures next year. With the sector on an average of about 11 times forecast current-year earnings, and names such as PPR and Burberry in mid-single digits, luxury goods shares – unlike their products – now look cheap. But the only buyers are likely to be those who can take a very long-term view.

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