As storm clouds tower over the London economy it is difficult to imagine any of the capital's businesses having a "good recession".

But while banks, retailers and manufacturers grab headlines for all the wrong reasons, it is far from the whole story: there are some winners.

Indeed, many of the capital's small businesses are coping well with the downturn and a few are thriving. Some are in sectors that inevitably benefit when consumers feel the pinch - repair businesses such as garages and cobblers for example.

Others are exporters who have seen demand soar as the collapse of the pound makes them more competitive. Even some restaurants are doing better as diners "trade down".

Business leaders said every downturn throws up opportunities for quick-witted, or just fortunate, entrepreneurs. It also helps not to have too much debt.

Peter Bishop, deputy chief executive of the London Chamber of Commerce, said: "We have to be realistic about the state of the economy but there has yet to be a situation like this where opportunities have not presented themselves for many businesses. This downturn is no different."

For a select few the economic circumstances have never been so favourable. As Mr Bishop pointed out: "I've never heard an exporter not complain about the price of sterling - until now."

Even for those who are struggling, there are some silver linings. This week Business Secretary Lord Mandelson announced that the Government would guarantee up to £20billion in loans to small firms.

Sadly, thousands of London businesses will not survive this year. For many more it will be 12 hard months. But for the lucky few, it could be a vintage year.

City workers trade down to £60 a head

The restaurant

Sophie Bathgate and her business partner Rupert Power set up Sophie's Steakhouse in Fulham Road, Chelsea, in 2002 and have just opened a second outlet in Wellington Street, Covent Garden.

Business is booming — the Covent Garden branch handled 1,000 diners on New Year's Eve.

In Chelsea, the owners have noticed an upsurge in customers from the City who are concerned about their job prospects and are trading down from top-end dining.

Ms Bathgate said: “There has been an influx of City refugees feeling the pinch. They are used to spending £150 a head and now they are spending £60. But all things are relative. Our best selling item is now our biggest steak, the 28oz Porterhouse, and we have had to add more top-end wines to cater for this market.

“In Covent Garden we have noticed people are going completely mental at the weekends particularly drinking a lot more cocktails. No one knows if they are going to have a job from one week to the next and they need that release.”

Made in England label carries a certain weight'

The Tailor

Soho-based tailor Tony Lutwyche set up his shop in 2000, offering an edgier alternative to Savile Row.

His clients range from bankers and lawyers to chefs Gordon Ramsay and Tom Aikens and actor Hugh Dancy. He also dresses the English polo team. Lutwyche's exports jumped by 800 per cent last year.

Mr Lutwyche said: “I think the major reason we're doing so well is that we manufacture 100 per cent of our products in the UK. We're also working in a niche market which helps us.

“The Made in England label on our garments carries a certain weight and can be seen in the quality of the product. We're trying to re-establish British tailoring as the best in the world. We were already seeing a large growth in exports, but currency changes have been great news for us. The strength of sterling may have been great when you were going on holiday, but it was awful for UK exporters.

“Now our goods in Japan are almost half the price they were a year ago, and in the US we've signed a deal with Saks.”

He said the rise in exports last year was “admittedly from a small base”, but added: “We expect big growth again this year. We're taking our brand into new markets overseas, not just the US and Japan, but we're suddenly finding we're competitive in Europe.

“Opportunities abound for a lot of small businesses — although obviously to take advantage of them, you have to be able to get credit. Hopefully, the Government will be addressing this.”

We've seen new breed of diners coming
here'

The michelin chef

ALEXIS GAUTHIER is the chef patron at the Michelin-starred Pimlico restaurant Roussillon.

Despite the economic downturn, business has remained good over the autumn and winter with takings typically 20 per cent up on last year.

He puts this down to a seismic shift in the restaurant scene in London with flashy “destination” venues losing out at the expense of more intimate and slightly cheaper options.

He said: “We have definitely noticed a whole new breed of diners coming to the restaurant.

“They are big spenders of the type we haven't seen before who were previously more likely to eat at the top-end It' restaurants.

“We feel we're getting business people who are still looking for a gastronomic experience but who want to show they are prudent and knowledgeable rather than just having cash to splash. In the past all the City boys just walked into the latest big restaurant to open in central London.

“It has never been more important to be judicious and cautious and show real knowledge.”

Mr Gauthier said the average spend at the classical French establishment had stayed fairly stable at around £85 for dinner and £45 for lunch but he had noticed a trend towards buying less but higher quality wine.

Champagne sales, however, are definitely well down.

Survival of the fittest as Brompton Bicycle profits from gym exodus

The bicycle factory

Brompton Bicycle, based near Kew Bridge, is a rare breed on two counts: a manufacturer which is doing well despite the credit crunch, and one which still makes all its products in the UK.

Its foldable bikes have won a cult following since the company was founded three decades ago.

The company now operates Britain's biggest bicycle factory and produces around 22,000 a year.

Will Butler-Adams, managing director, said: “Brompton is in a recession sweet-spot at the moment. It's expensive to go to the gym and to drive, so people are getting on their bikes to try to save money and get exercise too. Some people are giving up their second car to cut down on paying the congestion charge.

“Our bikes aren't particularly cheap, but if people want something durable, which will stand up to the bumps in the roads, can handle being used everyday and that's good in the rain, then they seem to be coming to us. No one blinks an eyelid at spending £4,000 or even £10,000 on a car, so it's not that strange to spend £600 on a bike.

“You're not buying a toy or a luxury, but replacing something you might be able to sell for 10 times the amount, and saving yourself on running costs at the same time.

“Cycling has really been taking off in the last three years anyway, and the Mayor is investing more money in it this year, so I'm optimistic that sales will continue to grow in the coming months.

“People's concern about obesity has not stopped being a problem because of the credit crunch so there's still a drive to get people out of their cars and exercising. One of the ways to get that happening is to encourage people on their bikes.”

Business and pleasure keeps hospitality going

The hotel

The independently-owned Great Fosters Hotel in Egham, Surrey, is proving popular both with companies holding business meetings and couples seeking a romantic break.

A Grade One-listed building, Great Fosters became a hotel in 1930 and has an estate of more than 50 acres. Despite the hotel industry struggling, it continues to do a roaring trade and has recently invested £3 million in a building for corporate meetings.

Richard Young, director and general manager, said: “The beauty of having independent owners is they are in it for the long haul, and that means they plough profits back into the business. Our new Coach House facility for business meetings is a good example of that. The location has helped us: we're close to the M25 and M4 and near Heathrow, so Terminal 5 has given us a boost.

“Our business is primarily corporate, but there are a number of strings to our bow. We also do a lot of weddings — around 200 a year. I wouldn't say weddings are recession-proof, but people do tend to book a long way in advance.

“Anyway, not every part of the business world has been affected by the recession — for example the pharmaceutical sector seems to be holding up well, and they still want the cutting-edge facilities we offer. We expect the Coach House will bring in another £750,000 a year.

“We're going to have to work hard in 2009 but I'm quite optimistic. It's a unique property, a blend of history with modern facilities. We've got what people want, I think that's been proven in the last few years.”

People are learning to fix not replace'

The spares retailer

ESpares is an online retailer with a warehouse in Chelsea, which sells replacement parts for household and garden appliances.

The company sold more than half a million spare parts last year and believes this year should be even better, as consumers stop calling out the repair man or replacing broken machines, and learn to fix things themselves.

The company now employs 55 people across London.

David Laurie, chief executive, said: “The majority of what we sell is straightforward to install: a replacement shelf for your fridge, knobs for the oven — stuff anybody can replace. Everything has been about consumerism, people have been chucking stuff away and replacing it far too often.

“Why should people throw things away, when they can fix them easily?

“We are very hopeful about the coming year. If we can maintain our level of service, the pricing and the website, then we think we'll have a great 2009.”

Sales never better' for 100-year-old family firm

The fruit supplier

In times of economic downturn, office extras could be one of the first things businesses would cut.

But according to food supplier Fruit for the Office, sales have never been better.
Operating out of New Covent Garden market, it is the biggest internet fruit delivery company in the UK.

In 2006, Daniel Ox took his family business selling fruit on a stall online with £1,000 of his own money. The company now employs 15 staff, with annual turnover of up to £1 million.

Mr Ox said: “Some days we're taking on five or six new customers — businesses signing up for regular deliveries. I think it's because well-being has become a bigger issue for companies.

“Businesses want to get the best out of their workers. When they buy fruit, they are investing in their employees' health. Fruit is very cheap. some companies provide gym memberships for their staff and this is so much less expensive.

“My family has been in the fruit industry for 100 years, so we have decades of experience. I think sailing through a downturn is all about knowing your business and customers well.

“I'm optimistic for next year as I think we've got a great product.”