From bomb sites to Bulgari: V&A falls under the spell of Italian glamour

A new exhibition charts how postwar Italy transformed the world's perceptions of it, using its greatest export: style

The word glamour originally meant magic or enchantment: to "cast a glamour" was to cast a spell to make something appear different from reality. And it is glamour in this sense – what the author Virginia Postrel calls nonverbal rhetoric – that is at the heart of the V&A's new exhibition, The Glamour of Italian Fashion 1945-2014.

Not that glamour in its modern, mainstream sense is in short supply: there is, naturally, a leopard-print gown by Roberto Cavalli, and a devastating cutaway cocktail dress by Donatella Versace.

There is a stunning 1950s silk cocktail dress in millefeuille layers of scalloped violet silk by the largely forgotten Roberto Capucci, and a floor-length gown of beaded silver by Mila Schön that was worn by Princess Lee Radziwill to Truman Capote's Black and White Ball in 1966. (Both of these dresses are displayed with their matching evening coats: violet velvet and silver bead-edged white silk, respectively. That's glamour, right there.)

There is a slinky black silk dress worn by Ava Gardner, a pristine white gown made for Audrey Hepburn, and a sumptuous silver evening coat made for Maria Callas.

But the central message of this show is a serious one, about how fashion was used to transform the image and fortune of Italy in the second half of the 20th century.

The first image is of a bombed street in Florence in 1946, giving a stark picture of the physical and economic reality of a country with a 50% literacy rate and a badly tarnished international reputation.

The next room introduces as protagonist the figure of Giovanni Battista Giorgini, with letters and photographs chronicling how this exporter of Italian homeware persuaded his contacts in US department stores to travel by boat and train to Florence for fashion shows that brought together designs from all over Italy. Against all odds, the shows were an instant hit: after the first, in February 1951, a Womenswear Daily headline ran: "Italian styles gain approval of US buyers."

In the next room, the story has moved on a decade, to the golden era of Hollywood-on-the-Tiber: Rome has become an alfresco film set, and between takes the world's most beautiful people buy clothes and jewellery on the Via Condotti and enjoy romantic trysts on the Amalfi coast.

On to the walls of this room are projected images of Taylor and Burton descending arm in arm from a plane and Audrey Hepburn in sunglasses, ribbon-tied purchases swinging from her arm. (Publicity-savvy Ferragamo would book a photographer whenever he heard an actress was in the mood for shoe shopping. Indeed, this was the era which gave birth to the term paparazzo.) In stark contrast to the bombed street, Italy has become a playground, a byword for a chic and modern lifestyle.

This bold storytelling, casting the invention of "Italian style" into a simple narrative, is the exhibition's big strength.

Italy has no national museum of design, and fashion history as a discipline is still in its infancy there, according to the V&A curator Sonnet Stanfill. This, she says, has given the V&A the freedom to tell the story of Italian fashion almost for the first time.

In the second half of the exhibition, where the modern Italian ready-to-wear industry emerges, the clothes are familiar and compelling but the story loses some momentum.

This is in part because the cast list changes so dramatically: of all the designers who showed in the 1951 show, only the house of Pucci remains in business today. But apart from a few Benetton adverts, there is an absence of cultural context around the more modern clothes – a lack that is keenly felt after the gripping drama of the Hollywood years.

The exhibition's sponsor, Bulgari – whose diamonds are worn by Elizabeth Taylor in a 1967 photograph that has been one of the most reproduced images of the show so far – must be thrilled.

The show is beautifully and intelligently staged. A display of Italian textiles, which uses a digital map to show areas of wool, silk and leather production, has a subtle soundtrack of machines and looms.

The last and biggest room, devoted to the cult of the designer, has a vaulted, church-like, curved ceiling – but in silk. And classic pieces, including a Prada dip-dyed dress from 2004, an Armani man's suit from 1994, and a 1995 Fendi Baguette handbag are spotlit from below so that they throw soft, ecclesiastical shadows across the white silk above.

It is a smart trick, to depict these modern pieces as classic Italian artefacts. But while this makes for a soaring finale, the heart of this show is in the Roman Holiday glory years.