Prada Marfa, the sleek store that opens with "cocktails, picnic and guitar" in the Texan desert - except it will never "open" being a sculpture - has a pedigree. On October 20 2001, the downstairs window of Tanya Bonakdar's contemporary art gallery in Chelsea, New York, was papered over and the signage read OPENING SOON PRADA. The Guggenheim Museum's Downtown branch had recently become a Prada store, with a redesign by the admired architect Rem Koolhaas, so many were deceived.

"People were sad that Tanya was closing," says Ingar Dragset, the Norwegian Conceptual artist, responsible for the project with a Danish partner, Michael Elmgreen. "She got all these phone calls. Thanks for the 10 years. And, by the way, who is designing the new Prada store?" Chuckle.

Ahead lay Prada Marfa.

There is a history to art that uses - and sometimes abuses - the language of branding and marketing. In the early 1960s the company behind Campbell's soup took note of Andy Warhol's soup can paintings and sent a stiff cease-and-desist. Pop art's ecstatic press coverage changed that. "Every time they came out with a new flavour they would send Andy all the info," Tim Hunt of the Warhol Foundation says.

Ronnie Cutrone, another "appropriation" artist, applied to Warner Brothers to use Bugs Bunny's image in prints and was told there would be no problem. His publisher ran some off before the licence had been issued though. Warners' gung-ho lawyer swung into action. "I think the lawsuit was for $8m or something," Cutrone says. "And he threatened to go wherever my paintings were hanging and cut Bugs Bunny out with a razor."

Warners dropped the suit, Cutrone tore up his prints. The 1980s were ending. Branding was expanding from popular culture and becoming a dominant force up-market. Naturally this interested artists too.

In 1989 the Swiss artist, Sylvie Fleury, exhibited groups of shopping bags, recording her peregrinations, largely around swank boutiques. In 1995 Tom Sachs, a New Yorker, exhibited a Chanel Guillotine, a Hermes Hand Grenade and a Prada Death Camp. Did he ask permission? "It's always easier to beg for forgiveness than ask for permission," Sachs says, blithely.

When Elmgreen Dragset decided to build a Prada in the desert, Bonakdar put them in touch with Yvonne Force of the New York-based Art Production Fund. Force proposed Marfa, Texas, as the site. Her artist husband, Leo Villareal, comes from a local ranching family and there was the frisson that Marfa is home to the Chinati Foundation, a famous installation of post-war art, set up by the late Minimalist, Donald Judd, in an old army camp.

They reached out to Prada.

"We informed them about the project and asked if they would provide information about their corporate design and also if they would provide us with the shoes," Ingar Dragset says.

Considering that their project tweaks global branding and that their initial piece had foretold the gentrification of Chelsea, its galleries boutiqued to extinction, as in SoHo, a Bugs Bunny scenario could have loomed. But Miuccia Prada is a sophisticated supporter of the arts, Prada's consultant, Germano Celant, is from the Guggenheim, and their arts foundation has been active since the mid-1990s. Indeed, Tom Sachs, creator of the Prada Death Camp, is working on a project for the Fondazione right now.

"They have an understanding of where they are. I wasn't fully surprised that they were supporting it," Dragset says. Prada duly provided 20 pairs of shoes and several handbags from the Fall 2005 line for the window. Elmgreen Dragset drew the line at asking for moolah.

This brings us to the funding of such projects. The artists showed only one piece during Bonakdar's OPENING SOON PRADA show: a stopped clock in the corner, referring to the World Trade Centre events of six weeks before. "It really got people talking," Bonakdar says. "We sold it to a very good collection."

For Prada Marfa, they made 9ft aluminium signs recording the number of miles to Marfa from wherever an individual sign might be. "It's an edition of 10 . . . each one is $10,000 . . . we've sold seven. And when we've sold 10 the project will be covered," Force says.

The Chinati Foundation has been wary. "We know very little about it," said its Marfa director Marianne Stockebrand. "There's been an ad. We know that it's happening. But that's about it." Yvonne Force believes that Prada Marfa will fortify the area as a purist culture zone. "The artists are protecting the area by drawing awareness to a certain globalisation that can take place," she says. At any rate Chinati should long outlive Prada Marfa. The building will not be maintained. It will eventually become a ruin, its 2005 Fall line of shoes and handbags crackling to dust. That, at any rate, is the plan.