Chanel unveils its Métiers d'Art 2013 collection at Linlithgow Palace, Scotland

It is said that the ruins of the Scottish 15th-century Linlithgow Palace, the royal abode to the Stewarts and birthplace of one of history's most colourful (if unfortunate) characters - Mary Queen of Scots - is haunted by the eerie apparition of her mother, Mary of Guise. That ghostly gloom has now be eclipsed; last night fashion royalty was given its place in the castle's history as King Karl Lagerfeld commandeered the castle, creating a fairytale setting for Chanel's annual Metiers d'Art fashion show.

The event was arguably the most impressive, opulent and audacious of Chanel productions to date. Said Wallpaper* Editor-in-Chief Tony Chambers: 'Karl illustrated once again how a luxury brand should be communicated in the 21st Century: craftsmanship and innovation, heritage and modernity, good taste mixed with a healthy dose of ostentation. Money well spent on a spectacle that will leave an imprint for years to come.'

A platform for Lagerfeld's most prodigious haute-couture fantasies, the now legendary Métiers d'Art (a French term coined to encompass the Arts and Crafts) is Chanel's annual pre-fall range. Since 2002, Lagerfeld has used it as an arena to flex the creative muscles of the house's specialist craftspeople - artisans who create the feathers, shoes, hats and the like for Chanel's haute-couture collections.

Given the location, last night's fantasy was unapologetically Scottish. Sitting around an atmospheric medieval catwalk circling baskets of bonfires within the roofless ruins of Linlithgow, guests (whose seats were supplied with Chanel blankets to shield the chill, no less) were whisked away on a highland fling that saw tweeds and tartan, Fair Isle knitwear, sporran-inspired bags and argyle tights steering a collection that was also in part dedicated to Mary Stuart herself - one couldn't miss the oversized feather ruffs and the regal white gowns.

Chanel may be a modern house, but its very foundations are built on old-world artistry. At a time when fashion is being outsourced and mass-produced, the brand has cleverly ensured the preservation of the ancestral skills its artisans bring to the table with Paraffection, an umbrella set up in 1997, which now houses the likes of costume jeweller Desrues, feather maker Lemarié, embroiderers Maison Lesage and Atelier Montex, shoemaker Massaro, milliner Maison Michel, goldsmith Goossens, glovemaker Causse and floral finery maker Guillet.

Over the past ten years, the Metiers d'Art shows have been staged in Paris' Palais Royal, London's Phillips de Pury, and against a backdrop of Shanghai's skyscrapers on the Bund. Lagerfeld's decision to bring Metiers d'Art to Scotland is a timely one. Chanel recently added Barrie knitwear to its Paraffection family in October. The Hawick-based cashmere business has been an integral part of Chanel's knitwear output, producing the yarns for the likes of its iconic two-tone cardigans. The acquisition of the Scottish artisan house, which secures the jobs of the 176 employees, was unrelated to Lagerfeld's decision to show in Edinburgh this year, but it certainly bolsters the Scottish flavour of the collection.

Take a tour round Barrie Knitwear and see the process of Chanel's knitwear unfold

This season's collection, 'Paris-Edimbourg', was of course no coincidence; Lagerfeld has always made it his point to present this annual showcase in a country that is part of, or will to leave its mark on, the history of the brand. Gabrielle Chanel's long-standing relationship with the Duke of Westminster, who introduced her to Scotland through various trips to estates around the Highlands, heavily influenced the brand's famous tweeds and knits. It was only a matter of time before the spotlight shone on Chanel's introduction of the Scottish strand to the brand's DNA in the second half of the 1920s, and last night's affair was a fitting reminder.

Watch the full show here