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The recent pullback in China's economy and uncertainty about the U.S. stock market have left the luxury industry feeling less than confident.
But while these events have no doubt bruised affluent shoppers' psyche, experts said they're just the latest in a set of broader issues that are keeping a lid on luxury growth.
Growth in the U.S. market came in below expectations during the first quarter as tourists balked at the rising strength of the dollar, consultancy Bain said in its spring update on the state of global luxury goods.
In mainland China, ongoing restrictions on gifting continue to weigh on the market, which Bain predicts will decline between 2 and 4 percent this year.
And despite increased tourist spending in Europe—the result of shoppers taking advantage of a weak euro—the slowing economy and social unrest continue to spoil affluent shoppers appetites', shifting some of their spending toward more affordable luxury brands.
All in, Bain's latest forecast calls for the personal luxury goods market to increase between 2 percent and 4 percent this year. Not only is this a marked slowdown from the double-digit growth it experienced before the recession, it's a number that could be revised down given the recent shakiness in the U.S. stock markets.
"It is not a real impact on the wealth of the consumer, but more on their trust in the future," said Claudia D'Arpizio, the lead author on Bain's report. "It's a psychological impact [that is] very, very important in luxury."
Hana Ben-Shabat, a partner in the retail practice of A.T. Kearney, said the luxury slowdown started after the recession in 2008. According to Bain's research, the personal luxury goods market fell from 167 billion euros in sales that year, to 153 billion euros in 2009.
Though the market's value has since recovered—coming in at 224 billion euros last year—its growth rates are still a far cry from the double-digit gains posted prior to the recession.
"The fact is you can't just expect double-digit growth on a sustained period in any consumer marketplace," said Pam Danziger, founder of Unity Marketing.
Ben-Shabat said that geopolitical issues and concerns about global growth have played a large role in the slowdown, especially as individual economies around the world have become so interconnected.
In particular, currency swings are having a direct impact on which regions are experiencing the most momentum. In the U.S., for example, tourist consumption was historically around 10 to 15 percent, D'Arpizio said. But in the past two years, it peaked up to around 40 percent, thanks to strong flows of Chinese consumers.
As the dollar has strengthened, however, high-end brands including Tiffany have taken a direct hit in sales from tourists. Jefferies estimates that roughly 25 percent of the jewelry maker's U.S. sales are tourist-related, with the slowdown contributing to its recent earnings miss.
Likewise, despite a decelerating European economy, an influx of foreign tourists looking to capitalize on the weak euro is helping drive luxury spending there.
Bain's spring report called for 3 to 5 percent growth there this year, compared to 1 to 3 percent growth in the Americas. Still, Japan is again expected to be the top luxury performer, with 5 to 7 percent projected growth.
Bain is calling for stagnant performance from Asia, despite Chinese consumers accounting for more than 30 percent of global luxury spending.
"China still represents the biggest opportunity for global brands," D'Arpizio said.
Aside from shifting where sales occur, this geographic puzzle is also changing the types of sales that are occurring. In Europe, for example, local consumers are trading down to lower-priced affordable luxury labels including Michael Kors and Coach.
In the most recent quarter, Kors' European revenue grew 16.9 percent on a reported basis, to $216.8 million, compared to 1.2 percent growth in North America, representing $727.3 million. At Coach, whose North America sales continue to slide, European revenues posted double-digit gains on a constant-currency basis.
Ben-Shabat added that strength in Europe brings another concern for true luxury brands. As Chinese tourists travel west to scoop up large quantities of high-end goods for less, sales of second-hand goods through unauthorized sellers are on the rise.
Already, she estimates, between 10 percent and 15 percent of China's luxury sales are going through the so-called gray market. This has caused a slew of firms to adjust their prices so that they better align.
"If I am a luxury goods company, I'm going to be very worried about my China prices," she said.
Apart from the ebbs and flows of the broader economy, luxury brands will always face limitations from the number of people who can afford the products, even as the number of luxury consumers has increased, Danziger said.
Compounding this issue, she said, is the influx of companies competing for affluent consumers' purchases, and the need for publicly traded firms to expand their store counts to appease shareholders.
"I just think it's a losing business proposition the way it is today," she said.
Danziger added that the wants and desires of affluent consumers are also evolving. For one, consumers today place more value on a luxurious vacation than on having yet another expensive handbag. For another, many luxury shoppers—particularly the older crowd—already have everything they need, and would rather save.
But perhaps what's most defining is what Danziger referred to as the "demonization of the rich."
"Before the recession ... they bought into the status and having a status symbol," she said. "Today, the culture's just completely turned."