Kate Effect And 2012 Boosting British Fashion

Fashion is putting Britain back into the global spotlight as the industry enjoys an unprecedented spell in the sun thanks to the Olympics and the 'Kate effect'.

London Fashion Week kicks off today with more than 60 shows from 110 designers, including Burberry, Alice Temperley and Philip Treacy.

Caroline Rush, chief executive of the British Fashion Council, told Sky News why she thinks it is an exciting time for the industry.

"London has this very unique position, we're known as the creative capital of this global fashion industry. That's an incredibly exciting and dynamic sector," she said.

Caroline says the heightened level of interest in British fashion is due to a number of factors.

"In addition to it having been the jubilee, an incredibly successful Olympics and, of course, the Duchess of Cambridge effect, she travels the world wearing our incredible designers," she explained.

Burberry is one of the most anticipated shows of the week, and so far it's been one of those British brands enjoying success despite the economic downturn.

Its new flagship store opened this week in London, its scale showing both its confidence and vision for the future.

But the news was not all good, with Burberry announcing earlier this week that profits would be below expectations, leading to £1bn being wiped off its market value.

Neil Saunders, a financial analyst, says the results say more about the luxury market than Burberry in particular.

"This is not disastrous for Burberry, it's a marked slowdown and I think it starts the beginning of a more difficult time for the company," he said.

"But actually it says less about what Burberry is doing and more about some of the difficulties we're seeing.

"The economic conditions we're seeing in Western markets is slowing consumer appetite for luxury goods and that's also starting to spill over into some of the emerging markets which have had a very good run of growth and still will grow going forwards.

"But it's going to be much more difficult to get that growth because it's starting to moderate. Those markets are very crowded and competitive so this I think is the start of a new era in luxury which is a bit more challenging for the companies involved."

However, at a launch event for London Fashion Week to promote ethical fashion, designer Alice Temperley said she was optimistic about the future.

"It's the most exciting place to be in terms of new, interesting, exciting talent that knows how to deliver and sell, and they have business savvy," she said.

"So we've got a really good new generation that knows how to make clothes and deliver them, and you've got really good established brands converging back to London to put on a really good fashion week."

Highlights of the week are expected to include Burberry, Christopher Kane and the Vivienne Westwood Red Label show which takes place on Sunday, when Matthew Williamson, Temperley London and Topshop will also showcase their spring/summer 2013 designs.