LONDON | Wed Jan 19, 2011 - Traditional all-weather raincoats, designed for the working masses almost 200 years ago, joined the ranks of upmarket London fashion on Wednesday, when Mackintosh opened its first standalone store.

Scottish inventor Charles Macintosh created the process of spreading rubber onto cotton to make the world's first waterproof material in 1823. Now the "Mac" bearing his name has been transformed from working man's coat into luxury rainwear.

The brand's flagship boutique in the well-heeled district of Mayfair rubs shoulders with luxury outlets Carolina Herrera, Balenciaga and Loewe, aiming to lure the discerning shopper with a taste for British craftsmanship.

"We feel there's appetite for a historical brand with a heritage emphasis," Daniel Dunko, UK managing director of Mackintosh Ltd, told Reuters. "There's good demand for luxury goods and with us it's niche and different from the mainstream."

The luxury goods industry has recovered strongly from its worst slump in decades thanks largely to buoyant demand in Asia for traditional brands. Rival raincoat-maker-turned-luxury heritage brand Burberry reported better-than-expected earnings on Tuesday and said that it had confidence in the future.

Mackintosh has built up a cult following in Japan but opted to open its maiden store in the drizzly British capital to cash in on the city's international reputation as a "catalyst for fashion," Dunko said.

The two-storey boutique showcases the brand's latest collection of vibrant coats, hand-stitched in the company's Glasgow and Lancashire factories. Daring fashionistas can even opt for polka-dot and zebra-print items.

Made of cotton and silks, the latest raincoats contrast with a display of archive macs, designed to be functional rather than fashionable, and made from heavyweight, musty-smelling fabric.

Retailing for 465 to 925 pounds ($1,478) the modern raincoats appeal to 30-plus professionals, said Dunko, but also cater to younger customers keen to invest in a premium product.

"We're very niche and very limited and that's the calling even in the current economic climate," he said.

(Reporting by Caroline Copley; Editing by Paul Casciato)