It was either incredible planning or good old-fashioned luck that Burberry's annual profits and Sex and the City - the Movie were both released yesterday. Even more fortunate is that the characters in the film wear Burberry outerwear and accessories, both of which just happen to be the driving forces behind these impressive profits.

The company had to dig deep after its 150-year-old check design became the fabric of choice for chavs. It wasn't a good look for a fashion house built on traditional British elegance. The clever but naive idea to print a few affordable Burberry print headscarves and bikinis to rid itself of its stuffy image turned into a highly contagious virus.

Today the Burberry story is very different. Under the creative direction of Christopher Bailey and business control of Angela Ahrendts, the brand has moved smoothly from Walthamstow on to the world stage. So how has Burberry done it?

Well, the short answer is handbags. Ahrendts, who joined the company in 2006, made a dedicated effort to expand into luxury accessories. These are a brilliant marketing tool, which look their best draped from the arm of a Grazia-worthy celebrity. And, at an average of £1,500 a pop, handbags do nice things to sales figures too. They are also a gateway to even more expensive treats. Burberry Prorsum, the mainline collection designed by Bailey, is one of the most commercially successful shows on the Milan schedule. When he joined, in 2001, Bailey remained true to the brand's traditions with simple raincoats and elegant dresses. But, as Britain provides only 8 per cent of sales, each season the clothes have gained more and more global appeal. There is spikiness for the Parisian fashion crowd, glitz for the Middle Eastern petrodollars, and the Russians can't resist his sparkles.

Put the clothes and bags into advertising campaigns shot by Mario Testino and featuring models such as Agyness Deyn and the result is a very cool Burberry indeed. This has been a many-pronged attack that has only coat linings in common with Daniella Westbrook. Luckily, for Burberry, fashion has a very short memory.

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