This is a very interesting question. A fashion forecaster uses "knowledge of fashion design and fashion history" in combination with "consumer business" statstics to predict fahion trends..
First, many people believe that history is cyclical. For this reason, things that were once in fashion will come back into fashion at a point in time. So, if a person studies the history of fashion, he or she might be able to predict fashion trends.
Second, to be more sophisticated, a fashion forecaster can study history to make correlations. For example, when do certain fashions come into style? Are certain fashions in style more during a recession or times of social stress, such as war? Some good theory can help as well. Mary Douglas has stated that our bodies are a microcosm of the world. So, if relate this to our clothing, there might be some important insights.