Spending an afternoon exploring St James’s provides the senses with a touch of nostalgia. The exclusive shops, nestled amongst grand houses and gentlemen’s clubs, remind us of the time before British high streets became clones of one another, lined with endless Tesco Express and Starbucks outlets.

But St James’s is not simply an open air museum representing the Britain we used to live in – it is lined with highly businesses that remain profitable and are admired around the world.

Take Fortnum and Mason, the upmarket department store founded in the 18th century, where sales were £54.9m in the year to July 2011. Pre-tax profits were £1.1m during the same period, up from £53,000 the previous year. Clearly the store is doing something right.

Jermyn Street, in the heart of St James’s is known throughout the world for its shirt makers which display high levels of craftsmanship. Visitors come to enjoy the first-class service that the shops offer and others buy via mail order.

It’s the antidote to the claim that we no longer make things in Britain. We do – and we do it well. And along with the tailors and shirt makers, there are also galleries, smart boutique hotels, stylish restaurants and delicatessens.

The story of how St James’s grew from a rural village to an urban village is an interesting one and ties in with the emergence of St James’s Palace as the official royal residence when Whitehall burned down.

Charles II authorised Henry Jermyn, the Earl of St Albans, to develop the area in the 1660s and the streets were laid out in a grid pattern, centred on St James’s Square. In addition to private homes, largely for aristocrats who wanted to be close to the King’s influential Court, there was a need for bespoke clothes and shoes for gentlemen. The tradition of Jermyn Street was born.

Gentlemen’s clubs, which first appeared in the 18th century and flourished in the 19th century, survive today and number around 30. Such is the prestige that many don’t have their names outside and the waiting list for membership can be a number of years, and that’s after you match the qualifying criteria – for some you need to be part of a professional trade and for others you need 10 existing members to approve your application.

The discrete nature of the shops and clubs is matched by the highly secretive world that the many businesses in St James’s operate in. What may look like private homes hidden down quaint narrow alleyways could actually be the premises of a hedge fund manager or a wealth manager for ultra high net worth private clients. Many people don’t know exactly what goes on inside.

But for me, what gives St James’s its charm is its shops. As a new book points out some of these have remained unchanged for centuries. Huge queues form outside Paxton and Whitfield, the cheese shop, in the run-up to Christmas as people prepare for parties. It has been there since 1835 (although the building dates from a 1675).

And Floris, the fragrance shop, has been on Jermyn Street since 1730, when Juan Floris set up as a barber and comb maker, before he began to blend perfumes reminiscent of his native Menorca. The stunning shop front, with its brass nameplate, royal coat of arms and exposed timber glazing bars, was built in 1810.

With the added attraction of Green Park, St James’s is a fascinating area to explore. But what is most special is this is not simply an open air museum – age old businesses continue to bring in revenue today.