* Catwalks in the West, action in the East

The shows are almost over. Next week the glossy posse, bleached weary from their month’s sprint to the world’s four fashion capitals—New York, London, Milan and finally Paris—will forsake the bright plumage of the catwalks for the mundane headaches of balance-sheets and supply chains.

Everyone now knows what will be in discerning wardrobes next spring: blocks of colour, bold prints and dainty “lingerie for feet” (formerly known as nice shoes). But the fashion industry’s financial future is much murkier. A confusion of trends preoccupies the major brands: the rapid shift east of their customer base, a generational switch, as high earners get younger, and the challenge of making luxurious clothing accessible to new markets, including digital ones, while retaining the sense of exclusivity that makes people want to pay for them in the first place.

First the good news. Luxury brands are coping well despite global economic gloom. This is because the number of “extreme net-worth individuals” (industry jargon for people with so much money that an $8,000 handbag seems a bargain) keeps growing, especially in Asia. Claudia D’Arpizio of Bain & Co, a consultancy, predicts sales will grow by 8% this year, to €185 billion ($252 billion).

Some firms are generating such a huge heap of cash that they need platform boots to see the top of it. LVMH, a French group which owns 60 brands, including Louis Vuitton and Christian Dior, various lucrative champagnes and Bulgari, an upmarket jeweller, boasts that its sales have risen by 13% in the first half of this year, to €10.3 billion ($14.4 billion). Analysts reckon that LVMH’s profit margins for its luxury brands are a healthy 40% or so—twice as high as some of its rivals.

The various fashion weeks are a snapshot of the industry’s strengths and weaknesses. Milan and Paris are the main events: they bring together the big names from across the globe. New York is run more for the benefit of the buyers, especially American department stores. London prides itself on its “edgy” feel, showcasing designers fresh out of fashion colleges, alongside some big names such as Tom Ford.

One of the main conundrums for the fashion industry concerns what Angela Ahrendts, the boss of Burberry, calls “democratic luxury”. Firms want to sell more kit, to make more money. But the more they sell, the harder it is to convince customers that they are buying something “exclusive”: ie, something that hardly anyone else has.

Burberry, a British firm that makes pricey raincoats, got a fright a few years ago when its distinctive brown checks became associated with “chavs”—a white working-class group at whom snobs poke cruel fun. (For example: What do you call a chav in a suit? The defendant.) It protected its brand by making those checks quieter and costlier, and boosted its sales by expanding into China, where no one tells chav jokes. Its global sales were up by 27% for the year to March 31st 2011, to £1.5 billion ($2.3 billion).

All of the major companies are vying to expand into emerging markets. China is Burberry’s prime target, though South Korea is also growing fast and Brazil looks promising. Several houses are opening stores in Saudi Arabia. Louis Vuitton sells bags in mineral-rich Mongolia. “There’s a lot of money there,” explains Antonio Belloni, LVMH’s group managing director.

But will snooty shoppers in the West want to own what thousands of Chinese people are wearing? “You have to constantly stretch the brand upwards and make it more luxurious at the top end,” Mr Belloni says. He points out that Dior and Vuitton are making more bespoke goods for their wealthiest clients, who want a say in what the final product looks like. Even ready-to-wear shoes in Dior’s flagship stores can retail for well over €1,000.

All this fabulousness depends on creative spirits, who can be erratic. Dior urgently needs to replace John Galliano, its creative designer, who was dismissed after an anti-Semitic outburst in a Paris bar earlier this year. The value of top creative talent is high. Negotiations between Dior and Marc Jacobs, an American designer currently at Louis Vuitton, are said to have become “complex”, with Mr Jacobs rumoured to want between $8m and $10m a year. The new favourite to replace Mr Galliano, a young American called Alexander Wang, is less well-known but surely cheaper.

Outside the top trio of LVMH, the Gucci Group and Burberry, many independent designers have had a tougher time growing. Paule Ka, a French clothes brand with a turnover of €40m and a staunch following among stylish French women, recently allowed Change Capital Partners, a London-based private-equity company, to take over 70% of the business.

It’s founder, Serge Cajfinger, admits that recent times have been precarious. “When the crisis hit in 2008, we were a bit stuck,” he recalls. Many stockists lost their credit insurance, forcing him to cancel orders. To maintain sales, he shaved prices. He also wooed investors with the promise of a push into Asia and America. (America is still regarded as the hardest market for European brands to conquer.)

Companies which trade in Zeitgeist and aspiration, as top fashion brands do, have to hold on to customers whom Mr Belloni tactfully describes as “active semi-retired” (ie, ageing baby-boomers), while simultaneously seducing the young. It is a tricky balance to strike.

Ms Ahrendts cautions that the “millennial customer” is a different creature from the 20th-century luxury-lover. “For a start, the high-net-worth customers are often about 15 years younger than they were,” she notes. She has rapidly made Burberry’s marketing more digital. Its shows are live-streamed on Facebook, and sometimes use 3D and holograms.

Recently, Ms Ahrendts booked Keane, a rock band, to fly to Beijing and turn a Burberry store launch into a gig. One of the band’s most popular songs is called “Everybody’s Changing.” Which is true, if the queues outside Asian dressing rooms are anything to go by.