By Michelle Nichols

NEW YORK (Reuters) - Celebrities no longer grace just the front rows at fashion shows but are moving backstage as designers, making it difficult for new talent to get noticed, experts say.

Singers Gwen Stefani and Jennifer Lopez, hotel heiress Nicky Hilton and self-proclaimed "first lady of hip hop" Kimora Lee Simmons are showing collections in New York this week, getting attention more for their celebrity status than their clothing lines.

"The more established designers and even up-and-coming designers take it all with a grain of salt and say, 'Well, this creates a little bit of buzz around the business,'" said Wendy Liebmann, president of WSL Strategic Retail consultants.

"The only challenge is for the younger designers, the-up-and-coming. ... It makes it very cluttered for them to get coverage," she said. "The celebs get in the way a bit of that."

Aside from the celebrities showing spring and summer 2008 collections at New York's semi-annual Fashion Week, many more have capitalized on their fame to make a splash in the fashion and beauty industries.

Singers Justin Timberlake, Jessica Simpson, Beyonce Knowles and Victoria Beckham have launched clothing lines, along with hip-hop moguls Jay-Z and Sean Combs, or P. Diddy, and actors Sarah Jessica Parker and Sienna Miller -- to name a few.

Patricia Pao, chief executive of the Pao Principle retail consulting firm, agreed the growth of celebrity fashion designers made it hard for new, young designers to get noticed by the general public but not by fashion insiders.

"Those are the people that are looking to find the next Proenza Schouler to take under their wing and promote," said Pao, referring to a popular U.S. label created by two design school graduates.

'INSTANT FASHION'

Liebmann added that while the fashion industry had grown cluttered with celebrity designers, the life span of a celebrity brand was likely to be much shorter than that of a more traditional designer.

Top U.S. designer Ralph Lauren, for example, marks his 40th anniversary at this season's Fashion Week.

"In a world of instant branding ... celebrity creates that sort of instant fashion," she said. "The fashion industry has come to recognize that it's part of a way of keeping it alive and fresh but with a very short timeline."

Fashion journalist Dana Thomas explains in her new book, "Deluxe: How Luxury Lost Its Luster," how dressing celebrities for the red carpet became the "best, and cheapest, advertising a luxury business could do."

"When Madonna wore a sapphire satin shirt and black velvet hipsters from Gucci to the MTV awards in 1995, sales exploded: within days there were waiting lists for the pants in Gucci stores worldwide," she wrote.

Pao said celebrities were at an advantage over new talent because they had fans wanting to wear their clothing, unlike new designers who have to earn respect and credibility.

But she said she believed only Timberlake's "William Rast" and Stefani's "L.A.M.B." were brands that "actually have legs," saying other celebrity labels lacked substance and style.

"There's lots of room in the fashion industry for talented fashion designers," she said. "If you're good, you're good."