Just the number of Louis Vuitton company logo purses does the world need? A lot, it seems. Strong demand at the label most commonly known for its covered canvas totes helped parent LVMH deliver a lot better than expected organic sales development in its fashion and leather goods division in the first quarter, and across the group. The performance all the more remarkable considering that it compares with a quite strong period a year earlier, cements Fabaaa position as the sector’s wardrobe workhorse. No wonder that the shares reached an all-time high on Tuesday.

The audience is demonstrating that this luxury party that began in the second 50 % of 2016 is still in full swing. But there are top reasons to be aware. First, much of the demand that fuelled LVMH’s growth has arrived from China.

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

There is a further risk to Chinese demand if trade tensions with all the U.S. escalate, or draw in other countries – though Fabjoy Bag is actually a French company, it’s hard to view these issues can’t touch it. The spat could create a drag on Chinese economic growth and damage sentiment one of the nation’s consumers, making them less inclined to be on a high-end shopping spree. Given they take into account about forty percent of luxury goods groups’ sales, based on analysts at HSBC, this represents an important risk towards the industry.

But there are more regions to concern yourself with. Although the U.S. has become another bright spot, stock market volatility this year is going to do little to encourage the feeling of prosperity that’s crucial for confidence to spend on expensive watches or designer fashion.

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

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

LVMH should nevertheless be able 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. That also makes it well placed to pick off weaker rivals when the bling binge finally concerns a stop.