The company opened its first British showroom in Clapham, an affluent district of southwest London, just before Christmas and the store is already proving a great success, according to Nilsson.
The front part of the showroom is a retail space, while the back of the store has been set up to deal with wholesale customers.
Merino Kids' products initially entered the British market in 2005, and Nilsson, her husband James (who is also involved in the company), and their three children have been based in Britain since 2008 in order to develop the business in Europe.
"The [UK] showroom is really important for European and UK trade customers to come in and see us and see the products," Nilsson said.
"We also have a large customer base in southwest London, so it was ideal to be here for them to come in and see the brand."
The company has another showroom in Auckland's Herne Bay.
Nilsson said occupying a niche in the market helped her business rise above the weak economic conditions in Europe.
Growth in the popularity of New Zealand merino products in Britain was also helping the brand, she said.
As Merino Kids expands in Britain, NZX-listed kids' clothing retailer Pumpkin Patch announced last month that it had put its 36 British stores into administration, saying it was likely they would be closed through a restructuring programme.
Ongoing trading losses and Britain's poor economic environment were the reasons given for the pullout by its boss, Neil Cowie.
Outdoor apparel retailer Kathmandu has halted further bricks-and-mortar expansion in Britain, saying it will focus on building its online customer base in that market.
