TIME | KATE BETTS

Back in the late 60s and early 1970s, fashion designers created warm-weather clothes for affluent women who were heading south to the tropics, where they would wait out winter's chill in more temperate climes. They called it resort or cruise wear, and the tags stuck even when many of those women started staying home and going to work.

Today resort, that élitist-sounding fashion niche, has exploded into a full-blown category complete with runway shows, designer appearances and lots and lots of very salable merchandise. Originally conceived of as clothes to wear on a vacation--casual separates, swimwear, maybe a few simple cocktail dresses--these days resort includes evening gowns for the red carpet, accessories and suiting in lightweight fabrics like cool wool or cotton, something that could be worn to the office in mid-fall or early spring. As a business, it has become as important to big-name designers as the more high-profile clothes they create for their spring and fall seasons, not only for the long shelf life--merchandise sold under the resort label can sell at full price from late October all the way through to early April--but also as a fashion testing ground. Many European designers use their resort lines to try out ideas for upcoming spring collections. A color like last spring's grass green and a shape like the skinny pant first emerged in resort collections. For its 2007 resort line, Prada is introducing a new fuller shape, floral prints and a brightly colored soft leather bag. Chances are a variation on these looks will show up again on the label's spring runway. Prints are also an important trend at Louis Vuitton, where designer Marc Jacobs worked with English artist Pippa Cunningham to create travel-themed prints that playfully feature airplanes, anchors and motorboats.

Resort collections also provide an opportunity for press attention at a time when the market is quiet. In May, both Dior and Chanel invested in full-scale runway shows in New York City and Los Angeles, respectively. Chanel's elaborate presentation at a private hangar at the Santa Monica airport included a host of camera-friendly celebrities like a pre--Memorial Day rehab Lindsay Lohan, Victoria Beckham and Demi Moore, plus two Challenger 601 jets that carried the models right onto the "runway."

Resort wear is typically high-priced, and according to designer Michael Kors, the resort season represents the biggest sales opportunity for his signature line. In response to the demand for these clothes, Kors will, for the first time in 26 years, schedule trunk shows this fall to presell the collection to clients in his own stores.

"The idea that people are only buying these clothes to go to the Caribbean or on a weekend in Palm Beach is a complete misnomer," says Robert Burke, a luxury fashion consultant at Robert Burke Associates. "For retailers, it's about having fresh product on the floor. The luxury shopper is shopping now multiple times during the year. They're not just going into stores in March or September to buy their spring or fall wardrobes."

And they're not just shopping in the U.S., either. Many of the products designers offer--whether they be a floaty chiffon Dior cocktail dress or a printed Gucci skirt--are also in demand in new and expanding luxury markets, such as Dubai, India and parts of China. They're perfectly in keeping with another trend: global warming and the desire for lighter clothes. "From the Sun Belt to the global-warming issue, [resort wear] has evolved to reach a very broad audience," says Gucci CEO Mark Lee. "If you look at the items offered in the collection, there is a complete spectrum, from summer-weight suits to leather pieces."

For businesses like Versace S.p.A., the resort collection has provided an opportunity not only to presell most of the collection (as much as 70%, according to Donatella Versace) before it hit the runway but also to create clothing that is ultimately more accessible than the usual runway theatrics. "The customer feels more comfortable with this collection," says Versace, who made a special trip to New York City this month to present 24 resort looks to the press and buyers. "There's an easiness that is hard to do on the runway because the expectations are so much higher for fashion shows."

Indeed, a simple white piqué A-line Versace coat or a classic Chanel tweed jacket might not make the headline news that fashion houses are seeking for their big spring and fall presentations. But then again, as Versace reflected, "maybe the time of fashion shows as major events is over. This is a time of reality now."