The luxury sector has long been touted as the last bastion of booming sales during the credit crunch.

The jet-setting, privileged few are supposedly exempt from the financial pressures bestowed upon the majority by rising mortgage rates, the end of easy credit and rising food prices. However, could the luxury crown be slipping?

This week, Burberry financial officer Stacey Cartwright said the retailer will face “a bit of a stretch” meeting analysts’ pre-tax profit forecasts.

The retailer, which had previously been bullish – along with its peers – about the health of its wealthy consumer base, admitted that its top-end positioning “doesn’t insulate [it] completely” from a downturn.

Burberry shares crashed 16 per cent as it announced that third-quarter sales fell short of its expectations. Like-for-likes in its retail division, which accounts for two thirds of total revenue, increased 6 per cent after it sold more items at slashed prices than usual.

And the luxury sector’s horizons are set to darken in 2008, according to Bernstein Research senior analyst Luca Solca. He believes that a worsening global macroeconomic outlook will translate in to slower luxury market growth, dropping from his estimated 6 to 7 per cent growth for 2008 to 4 to 5 per cent.

“Our hard evidence showed that the idea of the happy few supporting the global luxury market in spite of cyclical downturns is not borne out in reality”, he warned.

Solca looks forward to PPR’s fourth-quarter update a week today with equal trepidation. He has slashed his luxury growth expectations for the group, which owns brands such as Gucci, Bottega Veneta and YSL Beauté, to half of what it achieved last year.

Solca says broader growth in what he describes as the “aspirational luxury” segment has made luxury and fashion “more susceptible to macroeconomic trends”.

So Debenhams chief executive Rob Templeman’s decision to focus on its top-end range Designers at Debenhams to combat poor entry price point sales may be a wise move. “We think it will be more resilient,” he said. “When it comes to the acid test,” he added, “the customer wants designer quality at good value prices.”

One chief executive of a value fashion retailer agrees. “In 2008, consumers will look to quality as a key definer of value,” they said.

However, the king of rock-bottom entry price value fashion, Primark, has today announced that its sales are as strong as ever and said the trend shows no sign of abating.

What is clear is that whatever a retailer’s positioning, the old adage retail is detail applies more than ever before in the present climate.

MF Global Securities analyst John Guy said of the luxury sector: “It's a very unforgiving market. If there's one chink in the armour, you'll get punished very severely.” A stark warning for all retail sectors in the coming year.