At London Fashion Week Peter Pilotto and his partner Christopher De Vos sent models sashaying down the runway in tight bright printed velvet and silk dresses slashed with mesh panels, key-hole halters and cut-out bodices reminiscent of swimwear.

"The Olympics will bring a sense of wellbeing, health and activity. This is bound to reflect on sleeker fashion shapes, stronger colours and fitted and sculptured fabrics," Wendy Malem, Director of the Centre for Fashion Enterprise, told Reuters.

The stretchy, slightly shiny material Pilotto and De Vos used to create their sultry dresses with bright yellow, blue and green prints set on a black background evoked sportswear, as did the quilted jackets which featured prominently in their show at a former fish market in central London.

"The puffy jackets are something new for us -- we find it very exciting to mix something very sporty with classic, elegant styles and find this new balance," Pilotto told Reuters backstage after his show.

Serbian-born Roksanda Ilincic took her cue from leisure wear, dressing models in sporty-style baggy hooded sweatshirts tucked into tightly fitting skirts, while Indian designer Ashish Gupta sent models out in hooded sweaters under fitted jackets.

"With a strong feel of athleticism in the air in the lead up to London 2012 Olympics, fashion is having a fitness moment," Wendy Elsmore, Director of the London College of Style, told Reuters.

"Fashion forward styles merge with sportswear influences, resulting in luxurious pieces fusing performance fabrics with feminine styles." she added.

Ilincic, whose creations have been worn by U.S. First Lady Michelle Obama and Kate Middleton, the Duchess of Cambridge, also combined an elegant turquoise maxi dress with a gym-style bag which she said would be ideal for carrying towels and swimwear.

SEXY SPORTSWEAR

Britain's Olympic team will don outfits designed by Stella McCartney this summer and the shades of red, navy, gold and blue she chose for the kit featured prominently on the catwalk at London Fashion Week.

McQ creative director Sarah Burton dressed girls in oxblood-coloured velvet dresses with delicate embroidery detail, Ashish sent his models out in gold-sequined jackets and trousers and at Christopher Kane's show bright red and dark blue dresses flowed down the runway.

McCartney's Olympic sportswear range includes dark blue and white jackets nipped at the waist with a bow -- a design which featured prominently at Burberry's (BRBY.L) show, where trench coats, cropped tailored bomber jackets and draped blanket front coats were all given a more feminine feel with brightly coloured bows around the waist giving models an hourglass silhouette.

McQ's Burton achieved a similar effect using black leather military-style belts with a gold buckle around khaki, tartan and grey coats, as well as around delicate dresses featuring brightly coloured flowers on layers of black tulle.

Sportswear-influenced clothing has traditionally been functional and lacked sex appeal, but the appointment of McCartney as creative director of Adidas Team GB and the spring/summer 2012 luxe sports collections designed by Victoria Beckham, Pringle of Scotland and Aquascutum have changed that, Elsmore said.

"Olympian inspired fashion just got sexy!" she said.

OLYMPIC BOOST

The British fashion industry, which has a direct value to the British economy of 21 billion pounds, is also set to benefit from the Olympics in terms of sales.

"We're planning a lot of traffic in the stores and I'm sure we'll do some nice business," Burberry Chief Executive Angela Ahrendts told Reuters on the sidelines of Fashion Week.

The Olympics and the Queen's Diamond Jubilee will drive a 3.5 percent increase in retail sales in London's West End shopping district in 2012, according to a report commissioned by the New West End Company.

Retailers in the West End will make an extra 16.6 million pounds in revenue as a direct consequence of the Games, the report found.

Events like the Olympics create a "halo effect" for the country, British Fashion Council chairman Harold Tillman told Reuters.

"It's a very, very good year for fashion. Fashion is sport, it's exercise and so are the Olympics. It's all about the same thing," he said.

British tradition and heritage, particularly established British designers, are likely to prove popular, Marlena Woolford, Managing Director of Inspiration Trend Analysis, told Reuters.

"It should increase interest in British design, British culture, celebrities, history and Britishness in general," she said.

(Reporting by Michelle Martin; additional reporting by Li-mei Hoang, editing by Paul Casciato)

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