High fashion for low prices: Haute couture houses trade in fantasy, and, in these times, more people want to fantasise. Given that a good year in the haute couture business is one where you lose even more money than usual, the prevailing mood in Paris was of recession-busting buoyancy. The big-name designers were falling over themselves to boast of how many outfits they had sold at below cost price, and how this proved that the fashion business was healthier than ever.

Jean-Paul Gaultier reported record sales, “but we don’t make any money out of it,” the designer assured journalists backstage.

Haute couture – the term translates as “high sewing” – is a spectacular anachronism. Colossal in its costs, tiny in its clientele and questionable in its influence, it still remains one of the great themes of Parisian life. In his book, The Fashion Conspiracy, Nicholas Coleridge estimates that the entire couture industry rests on the whims of less than 30 immensely wealthy women, and although the number may have grown in recent years with the new prosperity of Asia, the number of couture customers worldwide is no more than 4,000.

At this stratospheric peak of the rag trade, many designers never even meet the women who buy their clothes. Some are known only by numbered codes, do their buying through intermediaries and settle their bills from Swiss bank account

To qualify as couture, a garment must be entirely hand-made by one of the 11 Paris couture houses registered to the Chambre Syndicale de la Haute Couture. Each house must employ at least 20 people, and show a minimum of 75 new designs a year. So far, so stirringly traditional, but the Big Four operators – Chanel, Dior, Givenchy and Gaultier – increasingly use couture as a marketing device for their far more profitable ready-to-wear, fragrance and accessory lines.

It isn’t hard to see how this works in practice. “Haute couture is what gives our business its essential essence of luxury,” says Bernard Arnault, the head of LVMH, which owns both Dior and Givenchy. “The cash it soaks up is largely irrelevant. Set against the money we lose has to be the value of the image couture gives us. Look at the attention the collections attract. It is where you get noticed. You have to be there. It’s where we set our ideas in motion.”

The big idea being the one known in the trade as “name association”. Couture outfits may be unaffordable, even unwearable, but the whiff of glamour and exclusivity is hard to resist. The time-starved modern woman who doesn’t make enough in a year to afford a single piece of couture can still buy a share of the dream for the price of a Chanel lipstick or a Givenchy scarf.

For all this, couture has been in decline – the optimists would say readjusting to changed conditions – for years. The number of houses registered to the Syndicale has halved in the last two decades. Pierre Cardin once had almost 500 people working full time on couture, but by the Eighties the number had fallen to 50, and today the house is no longer registered.

Modern life tells the story. Younger women, even the seriously wealthy ones, find ready-to-wear clothes invariably more practical and usually more fun. Couture’s market has dwindled to a core of ageing European grandes dames, the X-ray wives of old money American families, and the female relatives of oil sheiks. Asia’s new wealth has slowed the decline without arresting it.

“Haute couture is a joke,” scoffs Pierre Bergé, the former head of Yves St Laurent – another house that no longer creates it. “Anyone who tells you it still matters is fantasising. You can see it dropping dead all around you. Nobody buys it any more. The prices are ridiculous. The rules for making it are nonsensical. It belongs to another age. Where are today’s couturiers? A real couturier is someone who founds and runs their own house. No one does that any more.”