SHE WAS FASHION'S CINDERELLA OF 1993, PLUCKED FROM VIRTUAL obscurity to create Hillary Rodham Clinton's Inaugural gown. But barely two months after Sarah Phillips danced at the Arkansas Ball in Washington, her coach has turned back into a pumpkin.

On Feb. 25 the investor who planned to finance her burgeoning business backed out. leaving the Manhattan-based Phillips, 37, without the $1.5 million to $5 million she estimates she needs to manufacture her fall '93 collection and expand her business. (Her spring line is already in production and will be in stores next month.) "It's funny to be in the White House one night and back on the Bowery the next," says Phillips, staring out the window of the minimally furnished downtown apartment that she shares with her husband, sculptor Tom Hatch, 42. "Naturally I'm depressed about it."

Phillips had thought that her sudden splash as First Couturier would help her evade a pitfall of the fashion trade: undercapitalization. Unfortunately, however, she picked an investor who didn't deliver. Shortly after the Inauguration, Phillips met with the CEO of a Manhattan brokerage firm—whom she declines to identify. He offered to raise several million dollars to help finance her business. "The last time we saw this guy was in January, and he told us there were no problems," she says. But after Phillips placed an ad in Women's Wear Daily for four pattern-makers, she learned that he hadn't gotten the financing. "Now we owe Women's Wear $2,000," she says. "We end up losing money."

The daughter of a business administrator mother and an investment banker father, Phillips first had designing ambitions as a child growing up in Toledo, Ohio. After attending the Parsons School of Design, Phillips worked for Yves Saint Laurent, Ralph Lauren and Christian Dior. Since she struck out on her own in 1990, her family has helped her out financially from time to time, but Phillips has never been comfortable depending on their generosity. "I put the clothes in the back of a taxi and took them to a couple of New York stores," Phillips says of her first line. "Henri Bendel placed an order for $60,000."

By 1992 she had 25 accounts, including Barbara Jean Ltd. in Little Rock, where Hillary Rodham Clinton purchased the butter-cream Phillips suit that she wore the night of her husband's acceptance speech at the Democratic National Convention. After that, Barbara Jean's then buyer, Michelle Revere, suggested that Phillips sketch an Inaugural gown. The idea for the violet dress that Hillary wore that night sprang partly from Phillips's own wedding gown. For her October 1991 nuptials to Hatch, Phillips wore a short dress with an overskirt similar to the Inaugural gown. After getting approval from the Clintons to make the design, Phillips contacted Broadway costume maker Barbara Matera to construct it. On Jan. 19, she and Hatch (who has put his career on hold to work with his wife) personally took the gown to Washington and were given a military escort from National Airport to the White House. "We went upstairs to the private quarters," Phillips says. "The Clintons had only moved in an hour and a half previously."

After the ball, Phillips—who stays in contact with the Clinton Administration—became a White Household name. Soon afterward, she landed on the VIP list at the Council of Fashion Designers of America annual awards gala at Lincoln Center on Feb. 1. "I think she is capable of staying the course," says CFDA president Stan Herman. "She is more of a name now than she was, and if there are any investors out there, she may just find them."

Toward that end, says Phillips, "it's back to the dog-and-pony act." To concentrate on searching for a backer, she has turned down an invitation to make some dresses for the annual pre-Academy Awards fashion show produced by Beverly Hills retailer Fred Hayman, who supplies clothes to presenters and nominees. "I understand that you have to struggle for the first few years, but now, especially after the Inaugural gown, I would have thought it might have been easier," says Phillips. "People have told me not to worry, but sometimes Tom and I see TV commercials for cruises to Alaska, and we look at one another and say, "Lets get out of here!' "

ELIZABETH SPORKIN
VERONICA BURNS in New York City

  • Contributors:
  • Veronica Burns.