Consumers already own so many clothes that each new item they purchase doesn’t spark happiness, according to a Morgan Stanley analyst.

He says leading apparel retailers such as H&M, Inditex, Gap, Macy’s, Kohl’s, American Eagle and Abercombie & Fitch are overvalued.

The only way apparel markets can grow is if clothing becomes more expensive, but he says that’s also unlikely to happen.

The apparel market has “hit a ceiling” and is “going into structural decline,” according to a note from Morgan Stanley.

The cause of it? Consumers have reached peak happiness with clothing purchases, wrote analyst Geoff Ruddell on Friday.

His theory is based on the Law of Diminishing Marginal Utility, which states that “as consumption increases, the marginal ‘utility’ (or happiness) derived from each additional unit declines.” In other words, consumers already own so many clothes that each new item they purchase doesn’t spark happiness.

As a result, Ruddell said big clothing makers including H&M, Zara parent company Inditex, Gap, Macy’s, Kohl’s, American Eagle and Abercombie & Fitch are overvalued.

“The world’s leading dozen listed apparel retailers have, on average, seen earnings downgrades of almost 40% since the beginning of 2016,” he wrote, citing Datastream and Morgan Stanley data. “When combined with the ongoing challenges posed by online channel shift we believe that this could make for a very difficult backdrop for the apparel retail industry. Not just for this year, or next, but indefinitely.”

He also said the declines can’t simply be attributed to a shift in e-commerce. “This structural shift has been going on for the last approximately 20 years, yet is only in the last 3-4 years that the clothing retailers have begun to find trading conditions so challenging,” he wrote.

Instead, it’s because clothing has become so cheap - which led consumers to purchase in huge quantities. According to data from Kantar, a consumer in the U.S. purchases around 65 items of clothing a year. A U.K. consumer buys around 50 items a year.

“Put simply, consumers would rather spend their marginal dollar on, say, going out for a meal, than on buying a 60th item of clothing in a year,” he wrote.

Clothing sales in developed countries have been stagnant or declining. According to Roddell, that means the only way apparel markets can grow is if clothing becomes more expensive - but that’s also unlikely to happen.

“In the near term we see scope for production to continue to shift from China to lower-cost countries in the region (such as Vietnam and Bangladesh,)” he wrote. He said the rise of “sewbots,” or robots that can perform each task in the production of a T-shirt, including cutting, sewing, and quality of inspection, could also drive prices lower.

“For many years consumers responded to lower prices in apparel by acquiring more of it. But expecting consumers to buy clothing in ever-larger volumes, in response to ever-lower prices, was never likely to be sustained in the very long term,” he wrote.