LONDON — Kate Middleton may have introduced the world-at-large to a small British label called Issa, but that bright, royal blue jersey dress the young royal-to-be donned on Nov. 16 is a longtime fashion favorite — with something of a dramatic past.

Brazilian-born, London-based Daniella Helayel, Issa’s founder and designer, recalls that when she first introduced her now famous collection of figure-flattering, brightly colored silk jersey dresses in 2001, hardly anyone even noticed.

This story first appeared in the December 28, 2010 issue of WWD. Subscribe Today.

“The first collection I ever showed was filled with leather and suede pieces and jersey dresses that were easy to pack, easy to take away on a trip. I thought it was a fabulous idea,” said the stylish and ever-smiling Helayel over lunch at an old-time Italian restaurant in London’s Chelsea.

“The show was at the [Hôtel de] Crillon in Paris. Just one shop — in Brazil — bought the collection. I cried,” recalled the designer, who was dressed for lunch in a fire-engine red knit Issa wool dress nipped at the waist, knee-high black boots and a little black mink jacket.

Long before Middleton discovered the label — “Kate found us through friends,” Helayel said, declining to elaborate — Issa was a growing business built on those same, brightly colored or printed jersey dresses that initially flopped. And Middleton is only the latest in a line of celebrities to don the label; others include Madonna — who wore Issa’s teal, pheasant-print jersey dress on “The Oprah Winfrey Show” in 2006; Scarlett Johansson; Kylie Minogue; Keira Knightley; Sharon Stone, and Jemima Khan. British princesses Beatrice and Eugenie are also converts to Issa, and regularly pop up in the front row at the brand’s London Fashion Week shows.

Next year, Helayel plans to relaunch her business in the U.S.; introduce e-commerce on the Issa Web site; open the first of six stand-alone stores in Brazil; begin selling a children’s collection called Baby Issa, and transform what’s now a clothing label with 200 stockists into a global brand. And contrary to British press reports, which have named her as one of the front-runners to design Middleton’s wedding gown, Helayel has not launched a stand-alone bridal collection. “I’ve done one-off designs for friends. That’s all,” she said.

Marc Abegg, the firm’s chief executive officer, declined to reveal annual sales. “It’s a small — but growing — business, and we’re on the lookout for licenses,” he said. Abegg, who recently inked a deal with Havaianas to produce Issa-designed flip-flops for the Australian and Brazilian markets, said the brand also is looking to launch fragrance and eyewear collections, and to license the children’s collection, which will be introduced early next year at Harrods.

After that first show at the Crillon, Helayel mothballed her collection of dresses and turned her back on jersey altogether. For the next few seasons, the designer — a Rio de Janeiro native who began her career in New York sourcing fabrics, finding factories, and buying clothes and accessories for Brazilian companies — worked with Swiss cottons, peasant-inspired patchwork dresses and lace. She sold to stores including Barneys New York, Maria Luisa and Intermix.

But those collections were often difficult to deliver or to produce, and she eventually ran out of money. It was Laura Moltedo, the former president of Bottega Veneta — and the mother of Helayel’s friend, accessories designer Gabrielecorto Moltedo — who took a 10 percent stake in her business and urged her to carry on.

That investment dovetailed with a growing interest in the mothballed jersey collection on the part of Helayel’s London friends. “I couldn’t even bear to look at those dresses anymore, but people began asking me about them,” she said. Her friends — some of whom were stylists and public relations reps — wore the dresses and started a trend. Helayel began showing her collections during London Fashion Week in 2003, and by 2005 was dressing a host of London celebrities and society types including Camilla Fayed, Francesca Versace, Olympia Scarry, Tatiana Santo Domingo and Josephine de la Baume.

Her design philosophy has never changed. “I love making clothes to hide defects and enhance the positive qualities,” she said. “For me, it always goes back to making a woman feel less fat and more secure about herself.”

Her initial inspirations were Pucci, Seventies Diane von Furstenberg, Averardo Bessi and Paganne, all of whose vintage pieces she collected. The bright blue, belted dress that Middleton wore for the engagement photo with Prince William, she said, has been a bestseller since 2004, when it was introduced, and retails for about 400 pounds, or $630 at current exchange. Its product number is DJ-157: Helayel loves to dance, and said the dresses are great for “spinning on the dance floor,” hence the DJ coding.

As for her royal tie-up, Helayel would only say she was “flattered and honored” that Middleton chose the dress for such an important occasion. “In Japan, in particular, the shops went mad immediately. And around the world, everyone who had the dress sold out,” she said. The dress was immediately knocked off by British stores including Tesco and Peacocks and sold for a small fraction of the original price. Abegg declined to comment on whether the company was taking legal action. “Issa has in the past shown a strong arm towards copycats,” he said.

Retailers would argue that Issa dresses were doing just fine before the Middleton bounce. The multibrand London designer boutique Matches had already sold out of a dress similar to the one Middleton wore weeks before Prince William’s fiancée even donned it.

“Issa does brilliantly at retail,” said Bridget Cosgrave, Matches’ fashion and buying director. “It’s one of those stealth sellers. It performs quietly and consistently, has such a broad appeal, and the prints are amazing — they have a very young take.” Cosgrave added that while the brand has always been a big seller, the sell-throughs are now 100 percent, and the store is boosting its orders for next season. In addition to stocking about eight dress styles a season, Matches sells Issa bikinis and beachwear.

For fall, Helayel said she’s going back to her roots, dipping into the archives and retooling her classic silhouettes — including the DJ-157, the halter dresses, gowns and caftans — with old and new prints. “I’ve got an amazing print archive and hundreds of dress shapes — most of which have never been used,” she said.