Sitting in his plush fitting room surrounded by walls of rolled fabric, Arshad Mahmood is the picture of a successful tailor.

The Pakistani entrepreneur came to Hong Kong in 1984 and started working for a local tailor. By 1992, he had managed to scrape enough money together to open his own business, New Arshad's Hong Kong Tailors, which initially operated out of a modest shop on Mody Road. Then in 1997, his uncle told him he was planning to retire and asked Mr Mahmood if he was interested in taking over his tailoring business, Punjab House.

For years, Punjab House was one of the official tailors to the British Forces in Hong Kong and had built up quite a reputation for quality tailoring. His shop and fitting studio is lined with photos of senior military officers and dignitaries in Hong Kong sporting their tailored uniforms and suits.

Taking over Punjab House couldn't have come at a better time for Mr Mahmood. His own business was building up a regular client base and was expanding, and Hong Kong's economy looked rosy. But shortly after, Hong Kong was thrown into recession, tourist arrivals dropped and people tightened their belts.

To avoid a rent hike and also to reduce costs, he moved the business which had been in the same spot in Tsimshatsui for more than 40 years to a more modest premises in Golden Crown Court on Nathan Road.

Although the move wasn't far -- into a smaller, cheaper ground-floor shop in a shopping centre -- he missed the walk-in traffic that he had come to rely on, and lost regular customers who didn't know where to find the relocated and renamed Punjab House New Arshad's Tailors.

"We did try to call all our old clients, but of course people also move and so we couldn't contact many of them," he said. "Just the other week, a man found our new shop and said he had been buying suits from Punjab House for over 40 years. So it is this kind of customers that we wish to retain."

Mr Mahmood attributes the success of the business to his talented Shanghai tailors and a business philosophy of being honest with his customers.

"If you don't have a good cut, no matter how good the material, you won't be happy. Perfecting the cut can only be gained from many years of experience," he said.

Cost wise, he makes no claims to be the cheapest tailor in town.

"We give customers a price and that is the price they pay. But we are not cheap. Quality doesn't come cheap," he said.

Instead of luring customers with cheap prices in an industry that some tourists have been know to tell a few horror stories about their experiences with 24-hour tailors, Mr Mahmood said he relies on word-of-mouth recommendations and quarterly business trips overseas to take regular clients' new orders.

He has got a Web site up and running (www.punjabhouse.com.hk), as a marketing tool for Punjab House which contains pictures of finished garments and customer testimonials.

And to keep in touch with existing customers, he travels every two or three months overseas to measure up old customers for their new orders.