Tucked away in Cross Street, Islington, with the local Italian deli just a couple of shops away, Canal already looks very much at home, just a month after first throwing open its doors. From the outside this new shop is all chrome and silver grey sobriety, but on the inside it is home to colour, sparkle and warmth.

Exquisite rugs cover the walls and floor, showcases glisten with jewels and gems and select glass vases decorate the shelves. Old and new jewellery sits side by side, silver and gold, fresh water pearls and precious stones all screaming out for your attention.

The odd pieces of furniture for sale within Canal's stylish interior are made by designer Nic Rhode, who makes smart but functional pieces in natural woods. His sycamore swing table, pounds 450, is one of those on show but a catalogue which lies nearby illustrates some of his more extravagant pieces such as a grand sweeping staircase. Take a peek behind the counter at the back of the shop and you'll see bunches of semi-precious beads strung up on hooks waiting to be restrung or incorporated into a piece of jewellery. Beads are also sometimes sold individually by weight and customers are welcome to bring in pieces of jewellery to be repaired.

Extravagant statement rings, guaranteed to attract attention, lie alongside delicate necklaces that have to be handled with care. A lot of the necklaces, though, are dramatically junky, their beads cut from rough, natural stones and rocks. This is down to owner Maya Brisley who spends a lot of her time in workshops in India overseeing the transformation of an original stone to an elegant final object and who prefers this sort of piece to the more popular polished effect pieces often on sale in Britain.

Everything - apart from a few pieces of jewellery and furniture which are made to order - is very much a one-off.

Items range from pounds 10 to several thousand pounds, with hand-block Mogul print saris costing pounds 125, Middle Eastern rugs priced between pounds 50 and pounds 4,000, Kilim cushion covers for pounds 20, and the vast selection of jewels ranging from pounds 10 to pounds 5,000. The mainly Italian and Scandinavian vases which are dotted around like choice works of art, are all made of striking and modern glass dating from the 1920s to the 1960s and cost between pounds 45 and pounds 450.

The sight of regular customers left alone to rummage through display cases to find exactly what they are looking for instantly demonstrates the relaxed attitude of the shop owner and the unusual element of trust that exists here. Maya stresses that the emphasis at Canal is on collaboration between the customer and the shop.

So next time you're passing, don't be shy, stop pressing your nose up against the windowpane and step inside.

Canal, 42 Cross Street, London N1 (0171-704 0222). Monday to Friday 10.30am-6.30pm, Saturday 10.30am to 7pm, Sundays noon to 5pm.