One morning recently, Bill Blass raced out of his East 57th Street apartment building. His chauffeur, who usually takes the designer cross-town to Seventh Avenue, was on vacation so he hailed a passing cab. At the first red light, Blass recalls, the driver turned and said, "My God, Bill, how the mighty have fallen."

At the peak of his profession, when even cabdrivers recognize him and call him by his first name, Blass can number among his customers the first lady and socialites across the country. His fashion empire generates about $200 million in sales each year with clothes for men and women, furs and fragrances, linens and eyeglasses, patterns and pajamas, cars and candies.

Last night his resort fashions were presented at the Phillips Collection. It was the museum's first fashion show and first fund-raiser. It was an almost instant sellout, though the ticket was the most expensive fashion show ticket ever sold in this town -- $250. Even the president and Nancy Reagan dropped by.

"Listen, kiddo, you really have arrived when you show to Washington with the president in attendance," Blass said yesterday over lunch at the Jockey Club.

Bill Blass is the designer of the 1980s. His clothes are expensive, noticeable, identifiable. "I don't think I particularly set the trends but I have an influence," he says. His endorsement of a ruffle treatment, a beautiful fabric, a silhouette, or a color prompts other designers to follow. He offers women pretty, glamorous clothes -- modern without being jolting, sexy without being scary.

A 59-year-old bachelor with graying hair, Blass is a matinee-idol charmer, a handsome friend and pet creator to the rich and chic -- particularly the rich. He clearly loves women, and many of his customers also are his luncheon and dinner partners. "He's a splendid designer, a splendid friend, a splendid host, a splendid and generous man," says Oatsie Charles, a social arbiter of Washington.

He has designed many clothes for Nancy Reagan; he submits sketches and on occasion she stops by his showroom for a fitting. Many think the black velvet and satin dress she wore at the inaugural gala at the Capital Centre was her most becoming. "With not one sequin," he says proudly.

Blass is so successful at making women look pretty and sexy that when Walter Annenberg looked around the room during a pre-inaugural party with the Reagans, and saw so many women in Blass designs, the multimillionaire ambassador-publisher teased Blass, saying, "Are you looking for a business partner?"

Recently, Blass turned down offers to put his name on cigarettes, automobile tires and braces for teeth. He also refused the chance to make the first designer caskets. "It was the idea of a California concern, wouldn't you know?" he laughs.

Bill Blass, casually chic, remembers the pearl-gray shoes he bought in high school. "A terrible mistake," he is quick to confess. "After that I didn't make many mistakes. That was a long time ago, babe," he laughs. "Today, I'm pretty good. The right loafer, the right everything."

Blass recalls being interested in the Vogues and Harper's Bazaars his mother had around the house when he was a young boy in Fort Wayne, Ind., where he lived next door to a costume rental shop. "The glamor of it all appealed to me. I knew I wanted to go to New York just as the boys reading Popular Mechanics want to go to Detroit, or those into movie magazines dreamt of Hollywood," says Blass.

He graduated from high school voted "the best dressed and the least likely to succeed," and landed a job as a sketch artist with the New York suit manufacturer David Crystal at $35 a week. After a stint as a sergeant in the Army, Blass went to a firm called Varden, then to Anna Miller as the third house designer, "the one always stuck in the back room," he says. When Miller retired and the firm merged with her brother, Maurice Rentner, Blass became Rentner's partner and designer. In 1970, Blass bought out Rentner and turned the business into Bill Blass Ltd., one of the first of the successful designer-owner businesses on Seventh Avenue.

"I was forced to be businessman as well as creator," says Blass of that new role. "When I had partners, I didn't have the freedom to do what I wanted to do. Now the business side has stimulated me."

It keeps him on the road frequently -- last week in San Francisco, last night here for the Phillips benefit sponsored by Saks Fifth Avenue. He has taken his show on the road for 20 years, since the owner of Martha's, a fashionable shop in Palm Beach, invited him to appear. He usually does informal commentary for these in-store shows, often with his tie loosened and his sleeves turned back, and, in summer, wearing no socks. He is on a first-name, kissy basis with many of his customers. "They are all my friends," he says. They also are his fashion barometers. "It is my exposure to what people wear and what they don't wear, what they can wear and what they can't."

What he sees now is that women aren't loving all the big and long and layered styles and ethnic clothes he and others have designed this season. "The public is tired of anything that is too much. I had the feeling we brought it back too soon. Even Saint Laurent, who started it all, ignored it this time. It is fine on the runway and in photographs, but it ain't wearable."

So, last Saturday Blass got a spurt of energy at his Connecticut home, an 18th-century converted stone tavern where he spends every weekend ("My golden retriever pups, Kate and Brutus, are there and I couldn't not go. They wait for me"). Instead of socializing with such neighbors as the Kissingers, the Ribicoffs and the de la Rentas, he sketched for spring. He won't say much about the specific clothes he designed, but the ruffles and other embellishments are gone. "Clothes that disguise the body, forget it," he says.

There will still be a glint of gold in the collection, but much less than this fall. "Luxury looks are fine," he says of his super-luxe fall collection, which is dusted with gold threads and rich furs. "Besides, people like the luxury better in the fall than in warmer weather." For spring and resort wear, the idea of dressing up hasn't diminshed, but has taken on a different character, he says, with lots of black and white and patterns including dots and stripes. "It may be a lame' mouselline dress under a linen jacket. There is more unexpected, more mixing of unusual fabrics."

The changes he regularly makes in his menswear are far more subtle. "It is a mistake to say you are a designer of menswear. You have taste so you edit menswear, you contribute your taste, you don't design," he says. "In fact, there is nothing worse than menswear that has been designed." For men, he adds, "Never underestimate appropriateness for your position and your ambition. An awful lot of men in three-piece suits are trying to get on the next rung on the ladder."

Blass' taste, literally, got him a bid from Godiva to "design" chocolates. "I'm a food freak and I love chocolate." He has created a brushed silver package, as well as the candies in his own line. "Americans like chewy, crunchy chocolate. Europeans like softer chocolate. I wanted the quality of Godiva and the taste of America."

One Godiva executive is plotting the selling of Bill Blass chocolates in Paris. Says Blass: "Wouldn't it be something if the only thing that I sold in Paris was a piece of candy and not one damn dress?"