Luxury goods investors are struggling to believe their own eyes. Just look at LVMH, the sector’s biggest company. On the one hand, the growth in Asian demand is stunning and sector watchers generally expect sales to continue in exuberant fashion in spite of China’s slowing economy. LVMH on Tuesday reported nine-month Asian revenues, in local currency, up 27 per cent. But investors must question whether this can really be sustained given the slowing global economy and the risk of a sharper downturn in the US and western Europe.

Tellingly, Bain & Co’s annual study of the luxury industry this week avoided specific forecasts for 2012. Analysts cited uncertainty. The problem with Asia in particular is that there is no history on which to base comparisons. On an economic basis, any Asian slowdown should hit sales. Yet luxury is not purely about financial considerations, but also bigger social trends such as a desire to fit in and show off wealth. HSBC estimates that sales of global luxury brands in China have risen more than 30 per cent a year over the past four years – far outpacing income growth, and suggesting it could keep growing in a slowdown.

LVMH is a defensive play in luxury terms. Its brands should do well if Asia delivers, but its heavy US reliance holds it back. In 2008, it held up well as champagne sales lost their fizz, with overall performance supported by Louis Vuitton, whose lower priced, but in-demand, handbags are affordable, not premium, luxury.