Design for Living

updated 10/06/2003 AT 01:00 AM EDT

originally published 10/06/2003 AT 01:00 AM EDT

On a 1976 trip to Canada, Diane von Furstenberg forgot her passport. No matter. At customs she pulled the latest copy of Newsweek from her bag, pointed to the cover—a picture of a woman in a chic colorful wrap dress—and said, "That's me."

In recent years that signature garment has been designer von Furstenberg's passport back into fashion's VIP lounge. After falling out of favor (she oversold her name and appeared on cable's QVC), she's thriving with a new perfume-and-cosmetics line, new shops in New York City, London and Miami, and a tennis-wear label created with Reebok and Venus Williams.

"Not only was I able to clean up the brand, but I'm considered hip among young people," says von Furstenberg, whose new generation of fans includes Jennifer Aniston, Gwyneth Paltrow and Julianne Moore. "That," says the 56-year-old grandmother, "is better than any face-lift."

Not that she needs one. She stays youthful with yoga, weekly facials and the nonstop business of running a company that did $50 million in sales last year. Manning the phones in the home above her Manhattan headquarters on a recent morning, von Furstenberg talks to her London rep about an opening gala, chats in French with a friend, instructs an assistant in Italian. Wait, another call. "Hi, darling!" she coos to granddaughter Antonia, 3.

There is always a moment, despite the hectic pace, for family. Jetting between the three homes and a yacht she shares with media mogul Barry Diller, 61, whom she married two years ago, she keeps up with kids Tatiana, 32, a writer in L.A. (and Antonia's mom), and Alex, 33, a fund manager in New York City. (Alexander's ex-wife Alexandra Miller, 30, is von Furstenberg's director of new business.)

This time around she's taking success more slowly. "My brand had grown too fast," she says, "and went really bad. It's very hurtful when people think, 'Oh, she's a has-been.' Or 'She did it once, but it was an accident.'"

Hardly. The daughter of a father who owned department stores in Brussels and a mother who survived a Nazi concentration camp, the former Diane Halfin grew up determined to make a success of herself, even after marrying wealthy Austrian prince Eduard Egon von und zu Furstenberg in 1969.

"Work gave me an identity," she told PEOPLE in 1997. "I didn't want to be dependent on Egon in anyway." In 1970, while pregnant, she began cutting patterns in her Manhattan dining room. "I had no training," she says. "I did it all by instinct." Five years on, instinct had moved 5 million wrap dresses.

By 1977 von Furstenberg's name was on makeup, glasses, umbrellas, even nurses' uniforms—bringing in $300 million annually. Then she sold the rights to the wrap dress to another company. "My name lost its identity," she says. "Its integrity. Its soul."

In the early '80s, she admits, "no one wanted to hear very much from me." Divorced in 1983, she moved to Bali, then landed in Paris, where she published English books in French.

When she returned to New York, and to fashion, "I had to eat a lot of humble pie," she says. Her first step was to offer casual wear on QVC and the Home Shopping Network. Her first two hours grossed $1.3 million. But she'd lost the aura that once drew comparisons to Coco Chanel.

Bringing back the wrap in 1997 changed that. "She is Seventh Avenue's ultimate survivor," says Wall Street Journal writer Teri Agins. "Once again she zeroed in on what women want—dresses that are affordable and look good on everybody."

That success gave von Furstenberg the confidence to return to a cosmetics counter now dominated by celebrity makeup artists. "I didn't do 'Your skin is this way, so you should wear this,'" she says. "Let your mood decide."

Her own mood these days is buoyant. In June she hiked in Machu Picchu with family and friends including Calvin Klein. "We were at 14,000 feet," says son Alex. "And she's right in front of the pack." Indeed, von Furstenberg has proved her stamina in the thin-air heights of fashion and has no plans to descend. "I've already retired once," she says. "I'm not retiring again."

Allison Adato
Elizabeth McNeil in New York City

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