Luxury goods are going out of fashion – at least if share prices are any guide. This year, leading luxury companies have at best performed in line with the MSCI World index (Kering, owner of Gucci) and at worst (Coach) trail by 40 per cent. More ominously, prominent investors have recently divested stakes in companies including Michael Kors, Hugo Boss and Jimmy Choo.

The luxury market promises high margins and limited cyclicality. Tuesday’s launch of the Apple watch confirms that even tech companies want in: the top-end model comes in 18 carat gold. But consumers’ appetites for glitter are slowly diminishing. A May report from Bain pointed to drags from European weakness and Russian market woes, and sees luxury market growth of 4-6 per cent this year. This matches 2013, currency moves aside. But China’s expected growth of 2-4 per cent, while not much slower than last year, is a sharp drop from the double-digit growth achieved in 2010 and 2011.

This rate of expansion is unlikely to support earnings growth in the mid-teens, or sector price multiples more than 20 times forecast earnings, for very long. And growth is getting harder to capture. Chinese tastes are changing rapidly. The Middle Kingdom consumer has developed a discerning palate far more quickly than developed market forerunners; an upmarket label is no longer a guarantee of acceptance. Nor is a high-price tag. But many luxury goods makers have chased the Chinese around the world at the expense of local markets. List prices have risen in Europe, for instance, as shoppers travel to find bargains. Meanwhile, the overcrowded China market is already welcoming discount malls. Luxury company divestments may yet present some good buying opportunities. But seasoned shoppers know it’s all about the price.