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Diane von Furstenberg faced a bitter quandary when she returned to the American fashion scene in 1990: Her signature product, the wrap dress, hung in the Smithsonian, yet no stores would carry it. "My brand meant nothing," she says. "I had become a has-been."

The Belgian-born von Furstenberg had made her mark on the New York fashion world in 1972 with her versatile dress, which was appropriate for the office yet sexy enough for a night at Studio 54. During the next few years, she sold five million of them. Then the market became saturated, sales dried up, and she sold most of her licenses to avoid bankruptcy. "I lost control," she says. She retreated to Europe.

In 1992, the designer embarked on a comeback. She started Silk Assets, one of the first clothing lines for QVC. "It was tacky, but it gave me confidence," she says. Then she founded Diane von Furstenberg Studio to design moderately priced apparel sold at upscale department stores. The latest wrap dress, for example, retails for $298. The line has been a hit with consumers and critics alike, and the business turned its first profit in 2003. For von Furstenberg, 58, whose fall 2005 collection features a Russian theme, success has been sweeter this time. "I was on the cover of Newsweek at age 29," she says. "To do it again now, that's even better."

Nadine Heintz