That is, indeed, a great photo, Bunny. Great example of the use of these distinct windows in many of the buildings in the area. Of course, No. 29 Hanbury St. had been occupied by weavers at one time.
Yes, the trade had fallen off considerably in the area by the mid 19th century for the reasons you have stated. I went through my research files on Dr. Phillips as I recalled some of his neighbors still in the millinery business. There was a Samuel England at 15 Spital Square in 1881 listed as a silk manufacturer and several children in households listed as apprentices in silk weaving. What was left by then seem to still be in the neighborhood of their origin in the Norton Folgate area and just east of there.
When evidence is not to be had, theories abound. Even the most plausible of them do not carry conviction- London Times Nov. 10.1888