Cutting-edge Lisbon

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New York, London, Paris, Milan? Move over funky fashion capitals of the world, Lisbon is the place to be. The city's cutting-edge fashion and design haunts are luring visitors who are after more than a souvenir magnet of a custard tart and a vintage tram.

While Lisbon has been known for its music (fado) and arts scene (think local artist Joana Vasconcelos, who has exhibited her quirky sculptures at the likes of France's Versailles), it's the city's fashion scene that's hitting more than local catwalks. Each year, as new designers enter the market, international fashion buyers come knocking on doors, while overseas visitors leave with suitcases stuffed with local purchases. Present up-and-coming designers include White Tent, Vitor, Ricardo Andrez and Marques Almeida.

Why the upsurge in interest and creativity? Eduarda Abbondanza, Director of ModaLisboa (Lisbon Fashion Week) says, "Lisbon has the freshness and creative energy of a Mediterranean European capital, mixed with a very easy going and culturally solid ambiance. Nice weather, low prices (compared to other European capitals) and a friendly and safe environment attracts a lot of positive creativity."

To experience a contemporary take on the city you don't have to venture further than a tight two kilometre radius. The pretty, tree-lined or cobblestoned streets of Principe Real, Chiado, Bairro Alto and Baixa (literally, 'downtown') are home to fashion shops, contemporary galleries and design ateliers.

Lidja Kolovrat's boutique in Principe Real. Image by Kate Armstrong / Lonely Planet

Principe Real

Principe Real is Lisbon's current hip strip. It oozes a contemporary-Berlin-meets-Barcelona-in-the-nineties kind of cool. The area is jammed with interior design shops, concept stores, and fashion designers: Ricardo Preto's 21pr Concept.Store (www.facebook.com/21prConceptStore), Nuno Gama (facebook.com/GamaNuno), Alexandra Moura (www.alexandramoura.com), and Lidja Kolovrat (www.lidijakolovrat.org), originally from Bosnia, but now established in Lisbon.

Nuno Gama shop exterior in Principe Real. Image by Kate Armstrong / Lonely Planet

The new kid on the block here is Embaixada (Praça do Príncipe Real 26; www.facebook.com/Embaixada), surely the world’s most unusual and beautiful ‘shopping centre’. This extraordinary Moorish-style mansion has been restored and its grand entrance leads to a stunning courtyard. From here, shoppers enter unique shops that showcase Portuguese designers and local products, from shoes to babywear.

According to Abbondanza, these individual brand names are contributing to Lisbon's current fashion landscape: "A few years ago Portuguese designers didn’t have their own stores, now the panorama is changing. In the last two years they have opened their own brand stores in Lisboa, many in Principe Real."

Portuguese shoes in Shoe Closet at Embaixada, Principe Real. Image by Kate Armstrong / Lonely Planet

Chiado and around

The elegant Rua do Carmo, in the heart of the trendy district of Chiado, has been the traditional home of Lisbon's wealthier patrons. These days, a more modern element prevails.

Clients yearning for exclusive garb can make appointments for bespoke day and evening fashions at Alves/Goncalves (Rua das Flores 105, 1st floor; www.alvesgoncalves.com) a prêt-à-porter studio. Elsewhere in the district, Filipe Faísca (Calçada do Combro 99; www.filipefaisca.com) woos buyers with demi-couture collections in beautiful fabrics, from leather and raffia to flowing silk.

The interior of Story Tailors, Chiado. Image by Kate Armstrong / Lonely Planet

Meanwhile, the quirky collections from Story Tailors (Calçada do Ferragial 8; www.storytailors.pt) appeal to a youthful, adventurous crowd. The designer duo reinvents iconic pieces with quirky touches – skirts that button into themselves, reversible coats and, true to their name, fairytale dresses. Think Alice in Wonderland's Mad-Hatter (Johnny Depp) meets Les Miserables' Madame Thénardier (Helena Bonham-Carter).

Nostalgic products at A Vida Portuguesa, Chiado. Image by Kate Armstrong / Lonely Planet

But Lisbon's creations extend way beyond garments. Enter proud Lisboeta, Catarina Portas. Determined to bring the country's past into the 21st century, Portas is reviving many of Lisbon's former traditional products and services with a funky retro take. Her high profile projects include A Vida Portuguesa (Rua Anchieta 11, Chiado and Pina Manique 23, Largo do Intendente; www.avidaportuguesa.com), beautiful shops offering a taste of nostalgia. Stock includes everyday items that were once household names: tins of Tricana sardines, Ach. Brito and Claus Porto soaps, Pinheiro ornamental swallows.

Portas, too, is responsible for rejuvenating Lisbon's Quiosques de Refresco (www.quiosquederefresco.pt). These beautiful refreshment kiosks are dotted around the city centre - at Largo Camoes, Jardim do Principe Real and Praça das Flores. During the 19th century, these were an important part of Lisbon but were gradually abandoned and had fallen into disrepair. That is, until Portas decided to revitalise them. These days, the spruced-up kiosks serve up old-time refreshments including leite perfumado (perfumed milk), iced tea, horchata (almond milk) and traditional lemonade.

Bairro Alto

The trendy district of Bairro Alto – wedged between Chiado and Principe Real– comprises a series of charming lanes and backstreets, formerly the city's poorer and least desirable area. These days it's another story– the area is crammed with alternative shops, hip hairdressers and boozy (if fashionably so) bars. By day, streets here have a slight grunge factor but in the afternoon, when party animals emerge from the night before and the shops and drinking dens open, it's the cool place to hang out.

DJ by night, hair-stylist by day, Antony at Facto Cabeleireiro. Image by Kate Armstrong / Lonely Planet

For those after a fashionable 'do', not local brew, Bairro Alto is home to Facto Cabeleireiro (Rua do Norte 40-42; www.factohair.com), one of the country's most celebrated hair salons. Charismatic owner, Antony, who hails from Britain, is an occasional DJ by night and permanent hair-stylist by day and, according to coiffed locals and visitors, is the scissor-wielding stylist to head to. For alternative head treatments, A Fabrica dos Chapeus (Rua da Rosa 118; www.afabricadoschapeus.com) is the spot for hats – it sells everything from pork-pie designs to casual flat caps. The designer of choice here is Serbian-born Aleksandar Protic (Rua da Rosa 112; aleksandarprotic.eu).

Alternative creative concepts

In nearby Alcantara, and accessible by tram or on foot from the city centre, is the LX Factory (Rua Rodrigues Faria 103, Alcantara; www.lxfactory.com). It's a must-visit for any artistic guru – more for the design and concept than the shopping; there are no shops, but a couple of atmospheric eateries serve up excellent meals. This former factory is pumping with hundreds of advertising companies, communications teams, artists, and temporary exhibitors who've pushed the creative boundaries – they designed their own innovative offices.

An exhibit at MUDE, Baixa. Image by Kate Armstrong / Lonely Planet

Baixa gallery

Whatever you do, don't miss MUDE – Museu do Design e Da Moda (Rua Augusta; www.mude.pt), a great last stop back in Baixa (downtown). This magnificent colonial building, a former bank, has been converted into an extraordinary space that's an encyclopaedia of high end fashion and interior design. It exhibits everything from Christian Dior's 1940s New Look Collection to a 1970s wiggle chair by Frank Gehry. The museum's interiors – including wires and concrete – remain exposed to reflect its role as, in the words of the gallery's director Ms Coutinho, a 'living organism'. True to its name (mude means change), the exhibition changes every three months or so.

That's not Lisbon's only revelation. Despite Portugal's much-publicised economic woes, the country's creative culture is stronger than ever. "Lisbon is becoming a hub of Mediterranean creativity, spreading Portuguese and Lisbon's soul – and easygoing way of life – all over the fashion world," says Abbondanza.