Luxury retailers are being forced to expand their stores on London's prime shopping streets, as fierce competition for the UK capital's best sites heats up.

Alberta Ferretti and Loro Piana became the latest to expand their existing sites, said agent Cushman & Wakefield, following the example of Italian shoemaker Ferragamo, which set a record UK rent of about 1,000 pounds per square foot in February as part of a deal to expand.

Unlike other retailers, luxury brands have bounced back strongly from the depths of the 2008 downturn, helped by strong demand from emerging markets such as China and Russia.

With spots on the capital's top shopping districts like Bond Street and Sloane Street in extremely short supply, retailers are jostling to secure the best spots, spurring some to buy up stores and others to settle for fringe locations.

Alberta Ferretti is expanding its store at 205-206 Sloane Street from 3,500 to 5,000 square feet by moving up into the first floor, while Loro Piana bought its neighbour's lease at 48 Sloane Street with the aim of merging two stores into a single flagship.

Retailers just can't resite because there's just no avaliable stores so they have to be creative either by going sideways or by going upstairs, Cushman's Head of Central London Retail, Peter Mace, told Reuters.

Increasingly you'll see more retailers occupying either whole buildings or at least the first or second floors of buildings so they can get the whole range of their merchandise in.

(Reporting by Brenda Goh; Editing by Greg Mahlich)