I'm coming late to this conversation, but I've enjoyed reading back through all the comments and I realize I was using the term avant-garde differently than many of you.
To me, avant-garde is almost particular phase in fashion, the one that a lot of you have described, Rei Kawakubo, Margiela, Demuelemeester, etc. Just like we use "modern" and postmodern" to refer to specific periods in literary / cultural history. So when I use the phrase, I often mean something reminds me of that particular aesthetic.
But that was without really thinking about it, and after reading all your comments, I realize that's definitely not the only way I use the term. I also think of design that's really pushing the limits of what is wearable or functional. So, even though there's no one correct definition, maybe I'll stop throwing around avant garde so casually about things that are practically a formula.
The question of what happens when the avant garde becomes mainstream... I was intrigued by the Margiela collaboration with H&M two years ago. The pieces they included were reissues of regular Margiela pieces from the past decade or more. So, first, is something still avant garde if you re-release it for a mass market? But on the other hand, if you look at the pieces, it's hard not to see a deconstructed jacket or a sideways dress as avant garde even if it's been done before. I'm curious if their sales met expectations. I was surprised they were selling such unusual things. (But for me it was perfect - even if I'm not avant garde enough to wear most of it.)