NEW YORK — When Susan Dell, the fashion designer from Austin, Tex., with the famous last name, decided to scrap her signature collection last year and start again from scratch under a new name — Phi — the change was symbolic of her philosophy that, in business, the possibilities are endless.

This story first appeared in the January 22, 2004 issue of WWD. Subscribe Today.

The Susan Dell collection, six years in, was generating about $2 million in annual sales. It was a respectable showing considering the designer’s unusual direct-marketing approach — selling expensive suits online and through trunk shows —?largely inspired by the business model of her husband, Dell Computer Co. founder Michael Dell, who amassed a fortune of billions ($9.8 billion according to Forbes) by pushing hardware directly to consumers.

But the collection’s growth could not keep up with Susan Dell’s ambitions or the pace through which she races each day, leading her to try a new approach — more in line with the standards of Seventh Avenue —?by opening up the collection to wholesale. At the same time, she is continuing to break the rules.

“I felt I was at the point where I had learned a lot, even though I had a limited background in fashion,” Dell said. “I felt I had taken the collection as far as I could on my own and I needed partners to take me to where I wanted to go.”

Dell started a new company last fall that she envisioned as an incubator for fresh ideas in fashion, one where she could step back from the traditional role of designer and allow a creative team to come up with modern concepts for a collection. She hired a president — Julia Hansen, a fellow triathlete who formerly ran Zoot Sports Inc. in San Francisco and before that was premium global brand director for Levi Strauss & Co., behind its launch of Engineered jeans — and a well-known creative director, Tim Gardner, a top designer at Calvin Klein from 1996 until 2002, where he was most recently creative director for design and, prior to that, was the right hand to Jil Sander.

It was Gardner who came up with the name for the collection while listening to a books-on-tape reading of “The Da Vinci Code,” Dan Brown’s best-selling novel that references the recurring presence of Phi — the “divine proportion” that demonstrates a ratio between features found throughout nature and art that always measures 1.618. That number, the word Phi and its symbol, a circle dissected by a vertical line, are each featured in the new label. Gardner recalled the concept of Phi from his study of art history, how artists like Da Vinci and Michelangelo intentionally incorporated the ratio into their work, and was intrigued by the parallel of working with such proportions in fashion.

Similarly, the infinite applications of Phi appealed to Dell as she considered several changes in her approach to the business.

The company is aiming for global distribution at the start, selectively targeting top designer retailers, and will launch with a runway show — Dell’s first — on Feb. 13 in the company’s new showroom. Phi is moving this spring from 499 Seventh Avenue into a 10,000-square-foot penthouse at 76 Ninth Avenue here, along the northern perimeter of the Meatpacking District, featuring 27-foot ceilings, a wraparound terrace and, according to Dell and Gardner, exactly the kind of open atmosphere they’re looking to project with Phi.

Where Dell’s signature collection targeted the underserved day-to-evening market with career separates that could easily be dressed up, Phi is looking to be edgier and more sophisticated, or as Dell said, “We’re very opinionated about style.”

“We don’t want to be locked into any aspect of what we are doing, not even where we’ll distribute or how we will design clothes,” she said. “There are infinite possibilities for us and I don’t want to be limited at all.”

Since the company began its transformation from Susan Dell Inc. into Phi late last year, Dell’s enthusiasm for the new venture has pushed the team into operating at what she describes as “mach speed.” She and Gardner have brought in a creative team to execute the fall collection, drawing a variety of experienced hands to leave an imprint on its design, including Andreas Melbostaad, Iby Ibriham, Yuka Sudo and Ingrid Solomonson, all of whom worked with Gardner at Calvin Klein and separately at Donna Karan.

At Phi, Melbostaad is design director and Ibriham is director of garment development. Part of the concept is to also open the collaboration to guest designers, who may work for a season or more on special projects.

“The newness is not working in a team,” Gardner said. “The newness is working in a visible team. It’s not just about me or about Susan, but about all of us.”

Dell has largely remained quiet about her plans since she announced she would relaunch in a wholesale venture this year, recently closing her four-year-old Austin store following the end of her lease. But she plans to pull back the curtain on the new collection next month in the midst of the New York designer collections.

A couple of years ago, Dell dismissed the idea of showing on a runway, questioning the effectiveness of a show for the amount it cost, but she feels Phi, with a range of looks from the strong and modern to feminine and poetic, has the strength to convey a message that can stand out. Even with Dell’s breakneck schedule — she flew in from Austin on a private jet for this interview, then flew back two hours later — she plans to personally present the collection at her new showroom, with Michael Dell and the kids there, too. So who’s paying for all this? Who do you think?

“Susan Dell,” she said.

There’s been a shortage of new voices and talent in New York in recent years, leaving plenty of room for Phi to move into the establishment, something which Dell seems to have every intention of doing. She would not disclose many details of Phi’s business plan, other than to say it is open-ended and depends on the industry’s reaction to the runway debut.

“We’re ready now,” Dell said. “I’m more than ready. I’m going to be there with bells on. But it has to be the right time and we have to be taking cautious steps. It can move at mach speed, but you still have to be careful.”