Made in Britain: How our fashion is being exported globally

Sharp designs and heritage brands are putting British clothes into wardrobes around the world. This summer's Diamond Jubilee and the London Olympics present a unique selling opportunity. Laura Chesters reports

It's just about the coolest Johnstons of Elgin has ever been.

The cashmere company has been keeping people warm for 215 years, but recently efforts to combine its long heritage with more modern glamour has given the Scottish firm's chances of cracking the global market a rosy glow.

Johnstons is in its fifth year of a collaboration with Christopher Kane, the multi-award winning designer who has dreamt up outfits for Kylie Minogue videos. Never mind that it is the only remaining vertical mill in the UK – meaning it does everything from taking the raw fibre to producing the finished garment for its own label. Supplying luxury brands including Chanel and Hermes has helped to lend it a new-found cachet with fashionistas.

Linny Oliphant, brand manager at Johnstons says: "We have recently re-branded and spent £1m on our Eastfield Mills site in Hawick. We remain true to our roots and customers love our heritage and the fact we are made in Britain."

With London Fashion Week in full flow, it is reassuringly familiar story. Add in hopes that the Olympics and Queen's Diamond Jubilee will lure the rich and famous to Britain from around the world, and 2012 is shaping up to be a big year for the British luxury goods.

Capitalising on this unique opportunity was top of the agenda last month at a breakfast organised by Walpole, the British luxury body, and hosted by jeweller Boodles on Bond Street.

There is a chance for some of Walpole's members to move up – from being part of a cottage industry to genuine challengers to those few UK fashion powerhouses, such as Mulberry and Burberry.

London Fashion Week is important to the capital: it pumps £30m into the economy and brings in £100m of orders for the designer brands that grace the catwalks. However, the show is still in the shadow similar events in the major fashion centres like Milan or Paris. As the chairman of a major Italian luxury goods house says: "London is known for watching the young and the up-and-coming designers but not for the large, established luxury houses."

Many of the designers whose garments make it on to the catwalk have wafer-thin profits; the most successful designers globally are supported by wealthy conglomerates that make the real money on perfume sales.

The figures also show the UK hasn't completely cracked the fashion market. The UK exports an impressive £3.9bn of clothing and footwear a year, but this is dwarfed by the £14.6bn of imported garments.

A handful of British luxury brands have made it big. Burberry has a market cap of £6.3bn and Mulberry is worth more than £1.1bn. Other successful labels have been snapped up by overseas buyers, with Jimmy Choo and leather goods firm Belstaff owned by Swiss company Labelux and McQueen and Stella McCartney part of French group PPR.

Like Johnstons, they are making the most of the British credentials as a way of wooing spenders. Burberry has been big on promoting its 'Made in Britain' roots. It is sponsoring a scholarship at the Royal College of Art and Design and last year expanded its factory in Castleford, West Yorkshire. The group even shows videos of its factory in overseas stores.

Harold Tillman, chairman of the British Fashion Council and owner of Jaeger and Aquascutum, says: "We are having our time. British fashion is back and we have the opportunity to grow globally. People want to buy British – made in Britain reeks of quality. Our customers are international – not just Chinese but from across the globe."

Upmarket jewellery brand and host of the luxury breakfast get-together, Boodles, also boasts a long history. Michael Wainwright, sitting in the plush surroundings of his lavish white leather and silk upholstered boutique in the heart of London's luxury sector, is the fifth generation of his family to run the 214-year-old business. Wainwright is trying to ensure the business keeps up with the 21st century despite its age, and is launching a website in Arabic and Mandarin in May. There are also shops planned for Hong Kong to add to the five Boodles has in the UK.

However, Wainwright argues that UK luxury groups cannot rely on using their long lives as unique selling points. For example, handbag and accessories brand Mulberry has been a dazzling performer and is a relative newcomer [created in 1971].

Wainwright says: "It isn't just about the heritage, it's making the people behind the brand accessible."

Wainwright is doing just this by cancelling his summer holiday, so that he is in town to welcome shoppers to his London stores during the Olympics and Diamond Jubilee. Similarly, Burberry will open its huge Regent Street flagship store before the Olympic flame is lit in late July The influx of summer visitors mean sales are expected to rocket. A 3.5 per cent increase forecast for the London's West End alone. The New West End Company predicts an additional £16.6m in revenue as a direct consequence of the Games. There will be impossibly wealthy tourists spending implausibly vast sums from the US, China, Russia, Middle East, Nigeria and Brazil.

The Jubilee celebration has a ready made face of luxury: the Queen and the Royal family. Julia Carrick, chief executive at Walpole, says: "For the luxury sector, the Queen and her family are the best ambassadors of all. The Queen has helped British brands expand to become global players."

Verdict Research forecasts the global luxury goods industry will increase by £37bn to £107bn by 2015. This market is not just important to the brands themselves. The manufacture of luxury goods does its bit for the UK's economy, while there is a wealth of other jobs the sector supports.

Luca Solca, Crédit Agricole Cheuvreux global head of European research with a focus on luxury, says: "The most important British brands seem less dependent on domestic manufacturing than what one typically finds in Switzerland or France. Hence, most of the benefits to the British economy come in the shape of high level job creation – creation, marketing, commercial and general management are typically in London – retail investments and operations, and all of the indirect effects a heightened level of economic activity typically brings."

The UK doesn't have luxury conglomerates on the scale of LVMH, Richemont or PPR but brands are – after two centuries in some cases – investing in global expansion for a brighter, luxurious future.

Johnstons of Elgin

Sales: £50m

Johnstons has been dyeing, spinning, weaving and knitting cashmere since 1797.

Burberry

Sales: £1.5bn

Thomas Burberry, a 21-year-old draper’s apprentice, opened his first shop in Basingstoke, Hampshire in 1856

Paul Smith

Sales: £196m

Sir Paul Smith opened his first shop in 1970 in his home town of Nottingham and by 1976 he had shown his first collection in Paris. He now has 12 different Paul Smith collections.

Mulberry

Sales: £122m

Founder Roger Saul was ousted from the Mulberry board in 2002 after a spat with then chief executive Godfrey Davis. The Somerset based company will soon be headed by a Frenchman when Bruno Guillon joins from French rival Hermes next month.