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The '70s mauve carpeting -- mercifully not shag, but spotted and slightly frayed -- meanders through the maze that is designer 's New York showroom. A dollop of a chair squats in a corner. A Warhol "Diane" hangs on the wall. Giant potted plants reference the fern bar era. And sculptures of sleeping dogs and cherubs dot the room.

The disco interior is showing its age.

Von Furstenberg, however, is not.

The glamour princess of the party decade remains trim. Her thick, almost-black hair hangs to her shoulders and she tosses it with a flirtatious flick. She has the impatience often assigned to youth, becoming slightly irritable when the business of celebrity -- posing for photos -- takes longer than she would prefer.

The simple dress style she created more than 20 years ago is back in vogue. But that's not enough. Seventh Avenue is full of retro icons. Von Furstenberg knows where the money in fashion is: with the masses. Her ambition is grand. With her TV shopping deals, a newly signed agreement with Avon and unabashed self-promotion, she's out to change the rag trade itself. And pocket the hefty profits. Despite her Avon ambitions, her glamour remains intact. Von Furstenberg regularly turns up in the gossip columns. She has been photographed by Annie Leibovitz and has partied with President Clinton and Vice President Gore. Her eldest child, Alexandre, recently married Alexandra Miller -- heir to the Duty Free fortune -- in a lavish Park Avenue wedding.

At 49, von Furstenberg happily claims membership in the baby boom generation, describing its concerns -- aging, financial security, time pressures -- as her own.

"I relate to those things," she says, "even though my body remains young."

Von Furstenberg seems ageless. If you don't think so, she'll be happy to tell you why you're wrong.

"She's a survivor. A hustler," says Alan Millstein, editor and publisher of the Fashion Network Report, a newsletter for retailers.

In the '70s, she sold more than 3 million wrap dresses and today understands bourgeois clothes better than most high-profile fashion designers. She, who once sold more than $1.2 million worth of merchandise in two hours on the QVC television shopping channel, markets her wares more efficiently than most clothing stores. The woman who recently signed a licensing agreement with Avon -- beauty supplier to the masses -- knows that fashion snobbery can get in the way of a highly profitable enterprise.

When it comes to the bare-knuckled business of selling, von Furstenberg has no shame. She has brazenly courted middle-of-the-road consumers -- a rare move in the fashion industry -- giving them what they want as quickly and as directly as she can.

The tough retailing climate has left stores facing bankruptcy court, stockholder revolts and bored consumers. Von Furstenberg, ever the dealmaker, may have the best clue to successfully navigating the future's retail landscape.

Or at least surviving it. It's a Wrap

On March 22, 1976, von Furstenberg appeared on the cover of Newsweek, hailed as the socialite dressmaker who'd made a fortune on a simple idea. She had no formal design training. She was pregnant with her second child, Tatiana, when she walked into the Vogue offices of fashion legend Diana Vreeland. When the grande dame raved about her simple frocks, von Furstenberg decided to set up a temporary showroom in New York's Gotham Hotel and present her wares to retailers.

"When she did those wrap dresses, they were fabulous. I had two or three of them," says Susan Rolontz, executive vice president of the Tobe Report, which advises retailers on trends.

"She had a real impact on dresses," Rolontz says. "She became a brand name. When people talk about those dresses, they refer to them as Diane von Furstenberg dresses."

The wrap dress was a no-brainer: basically a robe fashioned out of Italian silk. It was sophisticated but not intimidatingly chic. Because it sold for just under $100, almost anyone could afford it.

It also had a 29-year-old princess as its spokes-model.

She was married to Prince Egon von Furstenberg, a Fiat heir and scion of a faded Prussian royal family. The middle-class Jewish girl born in Brussels had met His Royal Highness at the University of Geneva, where they were students. They married in 1969. She was pregnant with their son Alexandre; his family was disapproving. The wedding -- of a royal to a Jewish commoner -- was scandalous.

By the time she appeared on that Newsweek cover, the two were separated, but that didn't matter. She represented glamour, a cosmopolitan lifestyle and luxury.

The wrap-dress princess marketed her name for every dollar it was worth. She had quite an empire: the clothes, a fragrance, jewelry, cosmetics, shoes. Her own company produced some of it, but much of it was manufactured through licensing agreements.

Her name was a moneymaker. But as it was slapped on a growing list of products, it began to lose its integrity.

In 1983, von Furstenberg sold her beauty business. A year later, she went off to Europe, leaving her remaining businesses in the hands of licensees. She settled in Paris, co-founded a publishing house and traveled.

Now she's back in charge. She runs her own clothing company. She bought back the beauty business, which has been downsized to just fragrances. She works directly with her licensees. She thinks she's got an answer to retailing's greatest dilemma: distribution. And she's prepared to explain, without a hint of irony, just why she's still fabulous.

For publicity purposes, the master marketer juxtaposes a recent photo of herself alongside that famous Newsweek cover. It makes a terrific advertisement in these times, since the wrap dress has been resurrected by the whole of Seventh Avenue.

"My contribution to fashion is quite large," she says.

In fact, Sandy Schreier, a renowned collector of couture clothes, has several of those wrap dresses among her treasures.

Still, von Furstenberg has never been, or considered herself to be, a gifted designer. She is a marketer and a saleswoman.

"I never looked at fashion in that way, from the fashion side of things. I looked at fashion from a woman's point of view," she says. "I design the way I'd pack a suitcase."

Which means that she works around a theme: a color, a pattern, a fabric. Her collections build from season to season. The blue blouse purchased last year matches the blue of the pants offered this season. Patterns complement solids. Nothing wrinkles too terribly. Nothing costs too much. And nothing is too fashiony. Avon Calling

For the licensing agreement with Avon, von Furstenberg created the Color Authority, a line of knit and silk basics introduced this fall. They will be sold door to door, office to office, around the world by Avon ladies. Prices range from $16 for a corduroy hat to $54 for a cotton knit cardigan.

"For what it is," she says, "it's amazing."

She loves Avon because she loves direct marketing. Go straight to the customer and avoid layers of retailing; that saves customers money.

"This is a big industry with lots of layers of people who add to the costs," she says. "Style doesn't have to cost."

"There is this snob appeal that people won't {get over}," she says. "I've always fought that. I think it's stupid."

Avon was impressed with von Furstenberg's marketing savvy and realism, says Barry Herstein, Avon's vice president of new business development and direct marketing.

Avon's customers, Herstein says, "cut a swath down Middle America." About 30 percent of them are black or Hispanic. They are middle-aged, married with children. Von Furstenberg designs easily digestible fashion in sizes small to 3X. "She understands their needs," Herstein says.

He also says the company, which won't release sales figures on the von Furstenberg line, has been pleased with customer response to Color Authority. But industry insiders say the collection isn't doing that well, that the styling doesn't have enough pizazz for customers and that the pieces look cheaply made. The Marketing Magnet

"She'd put her name on a Hershey bar if she thought she could make a buck," newsletter publisher Millstein says. "She's an opportunistic business person. . . . And she's laughing all the way to the bank."

In 1992, von Furstenberg created Silk Assets -- brightly colored separates that a woman could mix and match. She took them to QVC -- where her longtime friend Barry Diller was chairman and CEO -- and hawked them on television.

"Whether I like it or don't like it, I think at the end of it all, I am a super salesperson," von Furstenberg says. Then quickly adds: "But, of course, I can't sell something I don't believe in or I don't like."

In 1994 she introduced a collection called Casual Chic. It's full of comfortable knits designed to be worn to the dressed-down office. Again, she went to QVC to sell them.

In total, she has personally sold more than $10 million worth of merchandise on television.

"I was able to get credibility back," she says. "But I did more for QVC than QVC did for me."

Indeed, the media began touting television shopping as the next wave in retailing, with von Furstenberg riding the crest. She landed in Allure, Mademoiselle, Mirabella, Elle.

Her instinct about finding a direct line to consumers was correct, according to Joseph Siegel, vice president of retail services for the National Retail Federation.

"Distribution has always been the key," Siegel says. "What's different? From her point of view, she'd like to go around the retailers."

Right now, von Furstenberg has no distribution deal with a major American retailer. She doesn't put on fancy New York runway shows.

"She has no credibility as a fashion designer," Millstein says.

But that depends on one's perspective.

"Those Seventh Avenue designers need to get over it because their market is getting smaller and smaller and ours is getting bigger and bigger," says designer Anthony Mark Hankins, whose inexpensive clothes are sold in stores such as JC Penney and also on the Home Shopping Network. "As mass merchandisers, we make fashion happen. If we don't interpret it, it's not going to be a go."

Besides, says the Tobe Report's Rolontz, there are a lot of high-end designers starving and a lot of low-end designers driving Rolls-Royces.

Von Furstenberg's customers send her letters raving about the products. They send her photos of themselves gussied up in her silk tunics, drawstring trousers and multicolored scarves.

"The idea was these clothes . . . could adapt to any kind of woman," she says. "Sure, some of the colors are really loud, that's true. But the styling is very sophisticated." The Lady Has Style

Von Furstenberg is wearing a black tank dress.

She recently squeezed herself into a chic John Galliano gown -- one literally straight off the runway and a model's skinny frame -- for a visit to the White House. One of her staff members recalled that the princess was really proud of that dressing room accomplishment.

And when she arrived at the recent Metropolitan Museum Costume Institute gala -- on Diller's arm -- several guests commented that she was the most elegant lady at the ball. She was wearing a hand-embroidered coat that her ex-husband, Egon, had designed and given her last Christmas.

But when it comes to making a sale, the Avon princess knows what millions of women want to hear her say. And she repeats it like a mantra: "I always liked things that were very easy and very flexible, things that wear and wear."

Von Furstenberg has always understood the power of her name and her image. The socialite knows what entices mass market women.

Like Avon customers, they want a persona with which they can identify. "It has to be aspirational," Herstein says. "But it has to be achievable."

As long as she is glamorous, by association, so are her customers. Or so goes the notion. It doesn't really matter what they wear. Besides, she gives them a nice value for their dollar.

When she came here to Washington to launch the fall Color Authority collection, she compared, in her indeterminate European accent, building a wardrobe to the way one builds a circle of friends. The assembled Avon ladies loved her ability to convey a sense of fashion without being trendy. She was instructive in the science of selling and the skill of survival. "The older I get, the more I realize that if you're smart, you're lucky," she says, "because so many people are not." CAPTION: Retro-fitted: Diane von Furstenberg's ideas for fashion have a new outlet -- Avon. "I design the way I'd pack a suitcase," she says. ec CAPTION: The ever-svelte Diane von Furstenberg making a formal fashion statement.ec