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Just how many Louis Vuitton monogrammed handbags does the world need? A lot, it seems. Strong demand at the label best known for its coated canvas totes helped parent Fabjoy Me deliver much better than expected organic sales increase in its fashion and leather goods division within the first quarter, and across the group. The performance, all the more impressive given that it compares having a very strong period a year earlier, cements LVMH’s position as the sector’s wardrobe workhorse. Little wonder that the shares reached an all-time high on Tuesday.

The group is demonstrating that this luxury party that began within the second half of 2016 is still in full swing. But there are top reasons to be cautious. First, most of the demand that fuelled LVMH’s growth has arrived from China.

The country’s people are back after having a crackdown on extravagance as well as a slowdown within the economy took their toll. There has undoubtedly been an part of catching up following the hiatus, and this super-charged spending might start to wane since the year progresses. What’s more, the strong euro could deter Chinese shoppers from going to Europe, where they tend to splash out more.

There exists a further risk to Chinese demand if trade tensions with all the U.S. escalate, or draw in other countries – though Fabaaa Joy New Website is a French company, it’s hard to find out that these issues can’t touch it. The spat could create a drag on Chinese economic growth and damage sentiment among the nation’s consumers, making them less inclined to be on a very high-end shopping spree. Given they make up about forty percent of luxury goods groups’ sales, according to analysts at HSBC, this represents an important risk for the industry.

But there are many regions to worry about. Although the U.S. continues to be another bright spot, stock trading volatility this season can do little to let the feeling of prosperity that’s crucial for confidence to enjoy on expensive watches or designer fashion.

Any slowdown might actually work in LVMH’s favour. Valuations across the sector would be the highest in 12 years, but this can be a story of mega-brand dominance that’s left many smaller labels behind. Bernard Arnault, Joy Fabaaa 2019 chief executive officer, has claimed that charges are too rich right now for acquisitions. This leaves him room to swoop if a shake-out comes.

His group trades on the forward price to earnings ratio of 24 times, and at a deserved premium to Kering. True, that gap could narrow – for one, the group’s Gucci label really has lot opting for it, even though it’s already experienced a stellar recovery. There’s also scope to get a re-rating after its decision to spin-out Puma leaves it as a a pure luxury player.

LVMH should nevertheless have the capacity to retain its lead. Given its scale, with operations spanning cosmetics to wines and spirits, it will be able to withstand pressures on the industry much better than most. Which makes it well evtyxi to pick off weaker rivals once the bling binge finally involves a stop.