Dustin Hoffman well remembers his first Burberry mac. “When I was an unemployed actor, everyone said, ‘You’ll never get any work unless you buy a Burberry mac,’” he tells me. Bogart, Bergman, Hepburn, Sellers – all the greats had worn the iconic beige trench. So Hoffman saved up his unemployment cheques. “When I got to four, off I went to Burberry. These were the days when they only had one store – on Madison Avenue.” He says his hands were shaking as he paid the cashier. “As I walked out, all the lights on the block went out. Then the next block. Then the next.” His eyes narrow at the memory. “I almost fainted. I thought it was the shock of spending all that money.” In fact, New York was having a blackout. “True story,” he chuckles. “And then the work did start to come in.”

Small wonder, then, that the cream of today’s young Hollywood have joined Hoffman in a pilgrimage to the relaunch of Burberry’s Beverly Hills store, slap-bang in the heart of LA’s shopping mecca (Gucci to the left of us; Barneys to the right). It represents Stage One of what Team Burberry is calling “America Week”, a tightly scheduled flying visit that will see them take in a shop launch, a Vanity Fair exhibition co-launch and some morale-buffing staff talks (in LA); a meeting with top management at top department store Neiman Marcus, lunch with that store’s best Burberry customers and the acceptance of an award presented by the prestigious Fashion Group International at its 25th annual Night of Stars (in NYC).

Outside, the block is cordoned off. Paparazzi bustle and strain to see the next person shimmying down the white carpet, across the red rope and through the gold doors. Inside, Ryan Gosling, the Oscar-nominated star, mans the decks. “DJing’s all new to me but, you know, I like to keep busy,” he beams. “Idle hands…”

Christopher Bailey, Burberry’s bright-haired and bushy-haired creative director, the 37-year-old responsible for turning the label round from yesterday’s news in the Nineties to super-desirable, super-profitable toast of the fashion industry in the Noughties, greets everyone like old friends. Have they tried the mojitos? What was that like, house-hunting in LA? “When someone talks about being a gentleman, Christopher is a gentleman,” says Cat Deeley, the TV host from over here doing rather well over there, newly thin of ankle and thick of kohl. “I’m his number one fan.”

“He’s done so well,” says Mario Testino, snapper to the stars. “It’s a big job for a young guy. And he’s so hands-on! But then he was trained by Tom Ford.” He rolls his eyes. “Say no more!” The actress Mena Suvari says, “I met Christopher when I was doing a film called Trauma [in 2004] and we needed trench coats. I admire the tradition and the craftsmanship of Burberry. And it’s amazing to find someone in fashion who’s that down-to-earth.”

Billy Zane, resplendent in lime sports jacket and flat cap, does a dance to the Buzzcocks. Kate Beckinsale chitchats to Kate Hudson. Liv Tyler sips Veuve Clicquot. The evening swings. The guests seem to forget the traditional boldface party manoeuvre – photo at the front door, hi to the host, leave through the back door – and let their hair down. They are actually having fun. Job done, Bailey discreetly slips away just after 10pm. He is back in the roof bar of his hotel, the London – “A little piece of England in LA; ridiculous, I know” – by 20 past.

“He was nervous before this,” explains Sam Riley, the English actor who was Joy Division’s Ian Curtis in the film Control, a before-he-was-famous friend of Bailey’s and the star of Testino’s winter ’08 ad campaign for Burberry. “He’s from Halifax and I’m from Leeds. Halifax isn’t LA – it isn’t even Leeds. He’d rather be walking on the moors. “He doesn’t,” advises Riley, “like a w***fest.”

“Well, no,” concedes Bailey the following lunchtime at the London. “I’m not very comfortable in that situation. I’m very aware it’s an important part of the role, but parties are not the reason I’m doing this. I’ve never been intimidated in those situations; I just don’t feel comfortable in them. There’s a difference.” It hardly shows. Bailey is full of carpe diem and has a real curiosity about real people. That was key to his transformation of Burberry. It is the only luxury goods brand to cut through all classes and age groups, able to dress everyone from the Queen to working-class lads, as suited to Milan as it is to Millwall. At 153 years, Burberry is one of the world’s oldest brands, and its democratic reach is in keeping with its founder’s original vision. “Thomas Burberry dressed the royal family and the aristocracy, but also farmers and shepherds,” he explains in his warm, sing-song accent. With the invention of gabardine, Burberry was kitting out Amundsen, the polar explorer. During the First World War, soldiers adopted Burberry’s weather coats and the trench coat was born. In the Forties and Fifties it became as iconic as the film stars who wore it. “I love that it means different things to different people,” Bailey says. “I would hate for us to become this super-exclusive fashion brand.”

Yet by the Nineties, Burberry had lost its way so completely it was scarcely thought of as a fashion brand at all. Bailey arrived from Tom Ford’s Gucci in 2001, aged 29, and immediately took charge of all the in-house designs, plus the higher-end, out-of-house Prorsum line that had failed to catch on. He gently modernised the lot, while emphasising the tradition and culture of the brand’s British heritage.

Burberry went from fusty raincoat merchant to the acme of cool, starting a vogue for venerable, barely remembered labels attempting to “do a Burberry”, with varying degrees of success. Five years ago the brand weathered another storm when Danniella Westbrook and a thousand Essex boys took rather too enthusiastically to the Burberry check, and it briefly became the naffest sartorial statement around – visual shorthand for “chav”. Bailey sidelined the pattern, never removing it, but instead offering remixes and playful twists.

Now the brand is more than holding its own – in tough times. “Burberry’s sales momentum should continue to outperform the broader luxury industry,” commented an analyst at Citigroup last December. Indeed, the label reported a 9 per cent increase in group revenue for the last 3 months of 2008, although retail sales fell by 3 per cent in the last quarter, driven by underperformance in the United States and Spain, where sales had slumped by some 20 per cent. And neither is Burberry immune to the need for belt-tightening: in January it announced 290 job cuts in the UK and angered unions by closing its sewing factory in Rotherham, South Yorkshire, without telling workers.

By Bailey’s own admission, the brand remained “underpenetrated” in the US. In a flip for a luxury label, it had done better in the Middle East and Japan first. In 2008, it announced sales growth of 40 per cent in the former, and the opening of eight more stores; in the latter, a new licensing venture hoped to give Burberry “full exposure” to “the largest accessories market in the world”. Bailey appreciated the work that a combination of “people seeing the face behind the brand” and an A-list-endorsed shop launch could do during its America Week. “Customers, store staff and clients being afforded face time with a designer is a hugely powerful tool in building loyalty, particularly in this personality-driven time. And that’s very true in the US,” says Harriet Quick, British Vogue’s fashion features director. “Plus, Burberry has global potential. Being an essentially conservative brand of chic, it chimes with the times when people are on the hunt for lasting quality.”

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