Putting on the glitz

Times may be hard for the fashion industry, but in the brash, brilliant, celebs-with-everything world of Dolce & Gabbana, they've never had it so good. Janet Street-Porter reports from the hottest show in Milan

I'm sitting on a big yellow daisy, on a chair so narrow I can't get both buttocks on it. Next to me is a fat, sweaty Italian woman bellowing into a mobile phone while scrawling notes in a small book. She has an orchid stuck in her blouse, and dandruff speckling the shoulders of her black jacket, about two inches from my nose. On my (very) close right is a Japanese man clutching a bright blue hydrangea. He's not sweating - maybe he does martial arts, or has entered a Zen trance to cope with the surrounding hysteria. Opposite sits a smiley Sarah Ferguson, Duchess of York, with matching hydrangea-blue eye shadow, sporting a brand new, fuchsia satin blazer, which I suspect is a freebie from our hosts.

Alongside the D of Y is an attractive blonde model called Amber Valletta, and next to her, completing the holy trinity of front-row celebrities, is the singer Beyoncé Knowles. The ever-diligent Hilary Alexander, fashion editor of The Daily Telegraph, has just scuttled down the catwalk to get a quote for her readers, mindful that Telegraph women need their daily quota of celebrity tittle-tattle.

I have entered the fashion world's equivalent of a war zone - Milan fashion week - and no event generates more excitement right now than the catwalk show of Dolce & Gabbana's spring/summer 2004 collection.

It's a company that is doing extremely well. Elsewhere in the world of luxury fashion, unsettling rumours are rife. There are stories that McQueen is too expensive; that Gucci is having financial problems; and that Versace is past its best. Calvin Klein, meanwhile, has stepped down as a designer after many decades, while the queen of cool, Jil Sander is returning (after several years absence) to her own label, now owned by Prada. But Domenico Dolce and Stefano Gabbana, in the midst of all this uncertainty, are currently enjoying tremendous success. They fully own their 20-year-old company, and last year its turnover was over £300m.

That is enough to stop me laughing at tacky Lurex, animal prints, tarty snakeskin stiletto-heeled sandals, and endless frills. They've dressed Kylie, Madonna, Mary J Blige, Angelina Jolie, Jennifer Lopez and Kate Winslet. They've got Victoria Beckham in their corset dresses, and Naomi Campbell in their undies. Icons apart, D&G has cleverly caught the mood of 21st-century woman, and the hordes of people trying to get into this show are testament to their current pole-position in the fickle world of high fashion. (In fact, they are having two shows, one after the other, so big is the audience.) Their empire encompasses fragrances and bath stuff, accessories from sunglasses to handbags, an expensive Dolce & Gabbana range for men and women, and the cheaper D&G line for wannabes of both sexes. There are even jeans and bras, and clothes for children.

I have spent the previous evening in my hotel room, studying their annual report, a glossy brochure in which the sections on turnover, expansion plans and human relations are enlivened by rampantly erotic pictures of a gorgeous leonine female surrounded by half a dozen hunks. It's probably one of the most frankly fabulous company reports I've read in years.

It came with a press pack of the latest glossy-magazine spreads about Domenico Dolce and Stefano Gabbana. One features their gorgeous house above the Grande Corniche on the French Riviera, with a dining-table by Ron Arad and a simple set-up of three beds and three baths. This is their "spring weekend" hideaway, only a couple of hours' drive from Milan. Then there's the house on Stromboli, just north of Sicily, with a leopardskin bedroom, fake religious paintings of the pair as medieval saints, painted tiles, bright colours. Very Federico Fellini - the Dolce Vita period. This is their "two weeks in the summer" house, where Naomi Campbell is a regular visitor. How did Domenico, a tailor's son from Sicily, and Stefano, who trained as a graphic designer, rise up through the fickle world of fashion to the commanding position they hold today?

You don't need to be a psychiatrist to understand how a couple of (now middle-aged) gay clubbers can come up with frocks that are then copied from the top end of the market to the high street. From the moment that they met in 1982, D and G have never departed from a very simple ethos - if you've got it, flaunt it. Good taste is anathema to these two. Think Anna Magnani on acid; Gina Lollobrigida falling out of a frock; Sophia Loren in leopardskin; or Silvana Mangano in an S&M corset.

Feeding off and aided by pop music, they got their breakthrough when Madonna wore one of their jewelled corsets to a film premiere in 1991; two years later, they dressed her world tour. They've clothed her regularly since, and the designed special stage-sets and T-shirts for the celebrity audience when she played the Brixton Academy in 2000. Since then, Kylie used their tiny laced dresses to give her new disco-diva image a hard sell at the Brit awards in 2002; and they dressed the soul diva Mary J Blige for a world tour, as well as providing Victoria Beckham with a thoroughly sexy new image (although lately there are rumours that the Posh One has fallen from favour because she didn't turn up and sing at a charity event for them...)

Dressing famous woman and making them look voluptuous and desirable is obviously something that they are good at, but what is more interesting is how they have managed to translate this into a stunning financial success. Unlike Tom Ford at Gucci, John Galliano at Christian Dior, Stella McCartney or Helmut Lang, they actually own their business outright. They have seen a 41 per cent increase in revenue over the last few years, to sales of £300m last year. The global luxury market is worth around €60bn, and has been stagnating at the same level for two years, hit by poor tourism and fluctuating markets. There have been massive lay-offs in banking and allied businesses, and many luxury-goods firms have suffered as a result. But Dolce and Gabbana have been consolidating their operation, turning down an offer to buy from Gucci, and buying back their licences to develop their own production, and building factories to make their handbags, shoes and accessories, sales of which have risen in volume by 33 per cent over the last two years.

They have opened 12 boutiques in Japan, two new shops in Milan - one for accessories and one for "vintage" - as well as a shop in Munich, their first in Germany. But a huge part of their turnover comes from the D&G line, a cheaper version of the stuff the stars strut in on red carpets. They came up with the Britney and Kylie T-shirts worn by Madonna, cleverly reflecting their obsession with the transient world of pop stars. They know the mindset of the fans, and the needs of their heroines.

Dolce and Gabbana may target attractive pop-savvy teens and twentysomethings as their customers, but the reality is that their clothes and accessories sell to women of all ages who want to signal that they like fun. A couple of years ago, in the middle-class seaside town of Sestri Levante, down the coast from Portofino, I realised how much their look had filtered through to the mainstream. I saw the D&G look every night in bars, clubs and restaurants, walking the dog or just hanging out, worn by women from 15 to 55. Tight, tight, tight, verging on the trashy, self- confident, brash. Definitely ready for sex.

Before last week's fashion show, I paid a visit to the D&G store on Corso Venezia in Milan, just down from their elegant three- storey men's store. D&G was full of the most tarty kit you could imagine, from batwing black-and-white Lurex sweaters to shocking-pink tartan flat caps. A BacoFoil- silver plastic vest was printed with an image of Marie Antoinette and the motto, "Luxury shall survive". Pink nylon jackets were a riot of ruching and frills. There were clothes for D&G man; a department filled with brightly coloured underwear; sportswear emblazoned with their initials; and even disco wear in fun-fur for toddlers.

In short, every base was covered. Round the corner, at Dolce & Gabbana womens-wear, a skin-tight black satin floor-length dress was laced from armpit to ankle. A pair of emerald-green lizard shoes with matching bag stood nearby, watched by a couple of security guards. It was the same story at the accessories shop, where a black multi-buckled punk handbag is going to set you back £500 - one seemed to be selling every 15 minutes.

And what of the fashion show itself? It was a riot of mismatching colours, patterns, stripes, paisleys, flowers, lace, Lurex, embroidery, snakeskin, furs and beading. Clothes for people who want to look like they went to a jumble sale. The kind of merchandise that you dream of finding in one of Oxfam's central-London stores but never do, cast-offs from rich hippies going back several decades, beautifully made and randomly assembled. D&G woman will be wearing tiny layered-chiffon skirts with clashing paisley-printed tights, ludicrously high orange sandals, topped off with Sixties- style Lurex-lace jackets. Or she might opt for over-the-knee fringed white-suede boots, or swirly printed narrow velvet trousers with a clashing printed shirt.

Naomi Campbell was the most curvaceous female out of a bunch of pasty stick-insects twirling about in this stuff. But the fun was infectious, and we were all smiling by the finale: baby-doll dresses in blue and lime-green chiffon had jewelled collars and midriff bands. The corset frocks came out again. All the models wore clashing bras under everything. An anti-fur protester jumped on the catwalk as a white-fox stole wafted past - obviously one of D&G's fun "summer" furs. She was swatted away with a minimum of fuss.

After 30 minutes, it was all over. Dolce, bald, serious, short, and Gabbana, tanned, tall and chiselled, ran past, clad in matching black shirts and jeans, to grateful applause from a fashion press pleased that they had a set of pictures that every man in the office would enjoy. I remembered that I'd seen D and G in the flesh last July, at Elton John's White Tie and Tiara ball. They had ignored the dress code and were wearing jeans, and looked like a couple of hairdressers having fun. Now, they were smiling again, but then, wouldn't you, secure in the knowledge that you'd be selling £300m-worth of chiffon and luminous bras in the coming months, from Tokyo to Moscow?