It's not just luxury handbags that are wildly overpriced

London

MARKETS are in turmoil, but the diamond-studded luxury goods juggernaut shows no signs of slowing down. Shoppers are snapping up Louis Vuitton handbags and Gucci loafers. Even the hard-hit watch market is showing signs of revival.

It might be tempting to embark on some M&A, given how sales and shares of European megabrands such as LVMH Louis Vuitton Moet Hennessy SE and Kering SA have held up. Michael Kors Holdings Ltd. and Tapestry Inc (formerly known as Coach) both want to turn themselves into luxury powerhouses.