Fashion has not become an ugly place, according to those who run the business. LVMH's first-half profits may have dropped by 23 per cent, continuing operations at its arch-rival PPR fallen by 19 per cent, and profits at other luxury goods firms gone down as easily as a glass of Château Margaux. But luxury goods sales “aren't deteriorating any more”, Gucci's billionaire owner François-Henri Pinault said late last month. That also explains why talk of mergers and acquisitions in the sector has petered out, for now.

The ingredients for consolidation are still there. The industry is highly cyclical. Some of its leaders have healthy balance sheets: LVMH and Christian Dior's net debt to tangible assets sit at about 30 per cent, while Richemont has net cash. Many firms are reluctant cost-cutters. Outside these giants, the industry is highly fragmented. Yet deals have not happened.

One reason is that privately controlled firms have been unwilling to sell at the bottom of the market. The assets and brands might be there but not the prices to go with them. The same is true in public markets. Tiffany's share price is about half its 2007 peak. Even so, the stock has risen by 40 per cent this year to trade on almost 20 times forward earnings, pricing in a heroic recovery. At such valuations, trade buyers are reluctant to add to their collections of brands.

Private equity might be tempted. But having watched Permira wrestle with its €5.3bn acquisition of Valentino, and Christian Lacroix evaporate the $40m Falic paid for it, financial sponsors are understandably hesitant. Furthermore, luxury remains an unpredictable industry at the best of times, littered with monster egos and family feuds. Ironically, this reputation is at the front line in its takeover defence.