One of the fashion industry's most endangered relationships has been saved.

For more than 30 years, the Marx family, founders of the Saks Jandel store group, has owned the Washington area's two Yves Saint Laurent franchises -- one at the Watergate, the other in Chevy Chase. The Marxes remained loyal to the brand even as it lost its luster, continuing to stock YSL's familiar blazers with their peaked shoulders, matching roomy trousers and colorful blouses. Over time, they nurtured a group of dedicated customers.

But in the winter of 1999, Gucci Group purchased YSL for $1 billion. Tom Ford, who resurrected Gucci style, took over the beleaguered YSL design studios. Domenico de Sole, who helmed Gucci's financial turnaround, began to reorganize the YSL business.

By the fall of 2000, the conservative suits had been replaced with steamy sexuality, dramatic silhouettes and basic black. YSL had become a fashion industry favorite. Sales were up by more than 100 percent. But a long-standing relationship was now at risk.

As luxury brands sought to reinvent themselves and to polish their image, they championed a new business philosophy: vertical integration. Luxury firms want to control everything from production to the retail environment. Typically that has meant an end to franchise agreements. And so, after decades of loyalty, instead of sharing the success of a new YSL, the Marx family was in danger of reaping nothing at all. The franchises -- remnants of the old regime, the only YSL stores not controlled by the brand -- might have to be jettisoned. Nothing personal, just business.

Instead, the stores are getting a makeover.

Brand image is crucial to luxury labels, and one of Ford's top priorities has been remodeling the YSL boutiques. The first to be transformed under the guidance of Ford and architect William Sofield was New York's Madison Avenue flagship store, in 2001. The second was the Watergate shop, where renovations were completed last month. The Chevy Chase store will also get a makeover.

The new YSL Watergate boutique is a sleek black 787-square-foot space divided into a pair of intimate salons. They pose a startling contrast to the creamy ivory and the bridal white of the adjoining Louis Feraud and Vera Wang boutiques. Architecturally, the YSL boutique is designed to draw the eye up, to emphasize vertical lines rather than horizontal ones. Instead of well-stocked racks of clothes, there is a judiciously edited selection of clothes hung in dark oak wardrobes with brushed metal details. The design adheres to the minimalist school of retail in which only one or two versions of each garment is on display. Additional stock is warehoused in back rooms.

At the YSL Rive Gauche fall runway show in Paris last month, company president Mark Lee noted that he was pleased with the renovation and with this singular franchise arrangement. "There are no other franchises and there will be no other franchises," says Peter Marx, president of Saks Jandel. But this one has been renewed "for substantially longer than any other extensions," which Marx says have been two or three years in length.

Ford's recent collections have also eased concerns about fit and color -- or the lack of it -- that had worried Gary McFall, director of YSL stores for Saks Jandel. The trousers now sit at the waist, rather than at the hip. The earlier, low-slung design was more challenging to wear. Pants also are offered in both a narrow and full silhouette. There are tailored jackets with a traditional YSL pagoda shoulder but in a more modern, form-fitting silhouette. And, particularly in the fall collection, there is a wide range of colors, from emerald green -- as previewed on Julianne Moore at the Oscars -- to raspberry red. The collection "is now addressing a lot of different customers," says McFall, who is responsible for buying the collection for the boutiques. "I do all of the runway stuff and then I go into the showroom and I look for the definitely commercial stuff."

The renovated environment projects a more dramatic, sensual image for the iconic brand. That was essential to the new owners. But the collections have not ignored faithful customers. And that was essential to the retailing family that has sold the frocks for more than three decades.

In the made-over Yves Saint Laurent Watergate boutique, garments are hung in dark oak wardrobes with brushed metal details.