King of the styled west

A once-scruffy road in central London is now a designer heartland, says Hilary Clarke

Building work starts this week on the first London shop for Alexander McQueen, the hot name in UK fashion. Where will it be? Not Bond Street, traditionally the home of prestige designers, or even Sloane Street.

Mr McQueen has chosen Conduit Street, once a dowdy, run-down West End road only visited by people seeking a ticket from a Third World airline. Conduit Street, which links busy Regent Street and Bond Street, is emerging as a new hub for the fashion industry.

At least two more prominent designers are to open shops in Conduit Street this autumn, adding to the raft of premier fashion houses that have recently set up boutiques in the street. Mr McQueen, who also designs for French couturier Givenchy, will sell his own British line in the new shop which will be financed by the Japanese firm Onward Kashiyama.

The Japanese designer Issey Miyake is also planning to open up shop in Conduit Street in October, as is the new British designer label YMC. Prada Sport is rumoured to be interested in opening up a shop in Conduit Street as well.

Vivienne Westwood - who began her career designing clothes for punk rock group the Sex Pistols and is now the Grande Dame of British fashion - was the first designer to move to Conduit Street.

She bought a building there three years ago for pounds 1.5m when property prices were way down. "We discovered the street at a time when there were only airlines like Air Mauritius and Bangladesh Biman there," said Carlo D'Amario, Ms Westwood's business manager.

"We thought it was fantastic, but even our bank manager said don't go there." The building Ms Westwood bought, housing her shops and some of the company's administration, is now worth more than twice the price she paid for it.

Ms Westwood was followed by other designer labels like Krizia, Comme des Garcons and Moschino. Burberry's, the British luxury goods company in the throes of revamping its image, is also expected to emerge as the new owner of large retail premises on the corner of the street, currently being gutted by workmen.

Retailers are attracted to the site because it is cheaper than neighbouring Bond Street. "Conduit Street has done marvellously," said Chris Phillips, the partner responsible for London retail with the property company Healey and Baker. "There is a lot of life there, especially among independent fashion companies which find Bond Street rents a little hard to digest." His company recently sold another building in Bond Street, The White House, to a top international designer.

A YMC spokeswoman said: "We are a low-key label and we prefer to be out there on our own, and not be surrounded by the big commercial chains."

The emergence of Conduit Street as a fashion centre coincides with a revival in the fortunes of Bond Street as London's premier shopping street. Despite the economic uncertainties of the past couple of years caused by the crisis in Asia, local estate agents say the Bond Street property market has remained buoyant and retail space there is like gold dust. That is because the big designer labels, many of them owned by large fashion conglomerates such as France's LVMH and Italy's Gucci, have been racing to obtain sites in the street.

"The demand for Bond Street has been substantial for the past two years with strong international interest," said another local estate agent. Recent arrivals include a massive new Polo Ralph Lauren shop, the company's European headquarters, and flagship sites for Tommy Hilfiger, a new arrival to Bond Street, Calvin Klein and Louis Vuitton.

Edward Asprey, of the super-expensive jewellers Asprey & Garrard, is chairman of the Bond Street Association. He said: "Business is very good throughout the street. There is obviously a great deal of confidence around at the moment: the stock market is doing well, and there are plenty of visitors in town." He said that the strong pound has not deterred wealthy overseas visitors from spending their cash there.

In September the association plans to hold the first-ever Bond Street Fashion Show.

The situation has changed dramatically from only a couple of years ago when the street looked as if it might be heading for a downturn. The pessimism was triggered by the shedding of assets there by Christina Ong, known in the Eighties as the Queen of Bond Street . She sold her franchises in Bulgari, Guess and DKNY, largely because of the downturn in the financial fortunes of her husband, Singaporean investor Ong Beng Seng. His main company, Hotel Properties, staggered under the weight of the Asian economic crisis, causing him to sell some of his peripheral concerns. However, the Ongs still own the worldwide franchise for Armani Exchange.

The rush of the big fashion houses to open flagship stores in Bond Street can only fuel the popularity of Conduit Street as rents soar. "Rents have been keeping pace with inflation but we don't see them roaring away," said Mr Asprey.

He added: "There is nevertheless always going to be pressure in finding sites in the country's premier shopping street, and when a site comes up there will obviously be competition." One of the few outlets for rent, at number 42 Old Bond Street, has just been leased by the jewellers Cartier - for a cool pounds 320,000 a year.