Deluxe
by Dana Thomas
376pp, Allen Lane, £20

Now and again in this hectic, strident account of "how luxury lost its lustre", there are descriptive passages with power. They're very quiet. Dana Thomas remembers how in 1982 she shopped in Christian Dior's old Avenue Montaigne store in Paris for perfume, which the sales clerk "silently wrapped in sheets of matte grey paper without tape or glue and tied up with white ribbon". She recounts a recent visit to the Hermès workshop in a Paris suburb to watch the assembly of a Kelly bag, again in silence: one pair of skilled hands, two needles, metres of linen thread, a skin of Crocodylus porosus from Australia, or niloticus from Zimbabwe, or Alligator mississipiensis raised on the firm's Floridan farm, two inspections of the finished object. And there's a more conventional story of a raid by Chinese cops on a tenement workshop in Guangzhou, to round up pathetic kids pasting together fake bags: phoney Versace labels stashed in a tin, a wordless child who punches his timecard on the way out, still hoping to get paid.

In these and a few other moments, Thomas's writing changes as she explores what luxury meant - patience, skill, a knowledgeable interaction between creator and purchaser - before the word was both inflated and devalued; and also the misery attendant on its current global misuse. Overall, though, her book is constructed as American journalism - she's a Newsweek correspondent - as a sequence of interviews: "he told me", "she told me", the time and place, and the appearance of the interviewee, ritually remarked on. And it's financial journalism at that, with entire paragraphs, sometimes pages, of turnover figures, "sales racheted up", "double-digit growth", "successful initial public offers", and quotes such as "we believed it was an innovative yet legitimate way of leveraging our brand and enhancing its awareness in the luxury market" reported with no lifted eyebrow in the surrounding text.

Thomas's base thesis is simple and persuasive: that in 1977, the matriarch of the declining Parisian family firm of luggage-makers, Louis Vuitton, asked her son-in-law, businessman Henry Racamier, to take the company over. Makers of luxurious objects had traditionally retailed them through franchises but Racamier stopped supplying franchisees and opened his own shops - vertical integration. He used the profits released by the expulsion of the middlemen to expand, advertise, list the company on the stock exchanges of Paris and New York, take over the Veuve Clicquot champagne and perfume group, merge with the Moët -Hennessy ditto, and buy the fashion house of Givenchy in 1998. So far, so virtuous - the finance was corporate, but each brand retained integrity. But then, Thomas writes, Racamier allied himself with the only other, much younger, French businessman who had constructed a group of crafters of luxury garb and objects: Bernard Arnault, owner of Christian Dior and backer of Christian Lacroix.

In 1990, Arnault gobbled Recamier's LVMH conglomerate, spat out Racamier, and was free to purchase any company and hire any outrageous design talent for just as long as their catwalk pzazz pushed the sales of mass-luxe goodies. Arnault failed in his bid for the restyled Gucci Group, but, though his Demon King methods - a whiff of sulphur with every transaction - were loathed, his model of group ownership, which concealed any individual line's loss of lustre in the dazzle of conglomerate profits, now dominates the luxury business. If, of course, you define luxury as Thomas does - as being nominated brands of clothes, accessories, hotels and Roederer Cristal champagne swigged from the magnum by rappers.

The business is obliterating native luxuries worldwide. Thomas's fact and bargain-finding trips to Japan, China, India, the discount outlets of California and the luxury malls of Las Vegas, record our present in which significant percentages of the global population have caught, or been taught, the mad idea that they can acquire the signifier of modernity, immunity, celebrity, identity - Thomas can't or won't define what the fantasy they're after is - for the price of a Prada bag, or failing that, a Gucci wallet. Luggage is stacked so high throughout the book that I kept exclaiming "a handbag?" in Lady Bracknell tones, because Wilde's old bat was right - the notion that a leather sack with handles and a non-precious-metal clasp can confer a sense of origins on the socially and geopolitically bewildered is preposterous.

Thomas only presents the saleable present, though. Her history, other than that of labelled products as researched in company museums, is questionable - embroidery in China is around four millennia old, not the 10 she claims. (Some of her futures seem iffy too - even before the book was published, her preferred prognosticators, the Wall Street investment bankers Bear Stearns, had proved fallible.) She's thrilled to retail tales of spite and treachery among stylists of stars on the red carpet at the Oscars, but that doesn't provide much cultural context for the ascendancy of upmarket bling. There's hardly a mention of the market deregulation and the associated expansion of retail credit in the 1980s that supported the rise of Arnault and Racamier. Nor any explanation as to why the Japanese, who pay in crisp fresh cash, can spot a millimetric deviation in a line of stitches, and have always had local taste in craftsmanship, should consume the naffest Cartier in Hawaii's duty-free gallerias. (Must be the exoticism of the occident.) Thomas barely registers the displacement of physical reality by the camera: that we now look to photographs for guidance on what we should buy to look good in photographs, explains much about the immateriality of our material possessions. There's the main motivating fantasy, not to enjoy and live but to be seen in photographs to be above enjoyment while playing at living. An empress of China wouldn't now be buried with grave goods, stuff you could stroke and unroll and put on exhibition, just the latest copy of Chinese Vogue with many spreads of her modelling the current names in destination hotels in Dubai.

By the end of the book, Thomas sounds a bit glutted with the greed and inanity of it all. The Russians seem particularly raucous - next time revolutionaries won't storm the Winter Palace but the limestone hallways of Crocus City Mall outside Moscow. She begins to notice that the fabulousness of the Daslu department store in São Paulo, Brazil, depends on a huge staff of servile maids and multiple security gates: "Daslu's director of marketing explained to me 'The really rich don't go out and walk in the streets'." She tries to find what the "people who are as rich as air" (Karl Lagerfeld's definition) now dream about: bespoke Patou perfume created from the flowers of Grasse, too costly for the deluxe masses, an Alice Cadolle made-to-measure bra, handsewn couture new and vintage, and still those Hermès bags - Arnault never annexed Hermès. They are buying the sound of silence.