NEW YORK — William Reid, whose fast success helped him beat out Sean Combs for the Perry Ellis Award for men’s wear last year, has run into a serious hurdle, along with business partner Tony Smith.

The designers, who linked their businesses three seasons ago in an unusual partnership between their own labels, have lost their primary backer, an undisclosed investor from Chicago. The spring William Reid collection will not be produced, while Smith is still attempting to finalize production to meet existing orders for his signature women’s line.

Reid and Smith said they are currently looking for alternative investors, but added that the situation looks grim for their immediate future.

“It’s unfortunate and very sudden,” Reid said. “We essentially lost our financing after the first of the year, which was a bad time because we were at the beginning of production for spring and development for fall.”

While a number of detrimental circumstances happened at once to influence the decision of the investor to back out, Reid said the aftermath of the Sept. 11 terrorist attacks was a key factor in the reversal of fortunes for the young designers. Their spring collection was shown the day before the attacks, but the ensuing chaos in the city resulted in more than 50 canceled sales appointments, “and those were appointments we couldn’t make up,” Reid said.

The development is a disappointing setback for the team, who seemed to be having more success as a collaborative effort than they did on their own. After breaking into the retail scene in 1985 with a store called The Smiths, Smith designed on and off under that label until 1991, making a name for himself with clean and simple tailored shirts and jackets that were ultimately carried at stores such as Barneys New York. But he split with his former partner and put the brand on hold for a while to work for Banana Republic before again reviving the label in 1996.

Three years later, Smith and Reid, who was developing his signature men’s wear brand, formed an alliance in which Smith served as creative director on the launch of Reid’s first women’s wear line. Reid’s company moved into a large loft space on West 28th Street in Chelsea and expanded to a staff of eight, ultimately growing to a wholesale volume of $1.5 million last year and helping the designer earn a nomination for the Council of Fashion Designers of America’s Perry Ellis Award last year for men’s wear and win the prize over Combs and the Organization for Returning Fashion Interest.

As part of their business plan, they collaborated on a line of shoes and bags last year, as well as the planned relaunch of Tony Smith’s collection as a high-end women’s brand under his own name, using Reid’s production resources. As for now, Smith is working with the established contractors to complete spring orders, pending several necessary steps such as a critical fabric shipment.

“I’m going to try to continue,” Smith said. “It’s not easy. It looks like I will be shipping for spring, but it’s by the seat of my pants. I’ve had a number of ups and downs in this industry. You just have to take it in stride and hopefully find a way to continue. It’s no fun and it did kind of hit us all of a sudden. We weren’t prepared for it.”

The designers are pursuing other business partners, but also are considering other options, such as designing for other brands or additional freelance work. While they are attempting to keep their tight-knit staff together, their ability to do so would require the quick arrival of a new backer, since the firm had not yet become profitable, Reid said.

“It’s so weird as a business mode, when you look at what we do on our side of the fence,” Reid said. “There is really not a step that we do not touch. We design the product, ship it, produce it, invoice it and collect the money ourselves. When you add up all those processes and put an expense to it, it’s very difficult.”

There is a chance that the designers could come back on their own, but the expense of maintaining their own sample production and showroom would be too great to continue under their existing business plan, Reid said. Even with the added publicity that came after winning the CFDA award, the designer did not expect to post a profit for at least another year.

“To run a small design company is hard,” Smith added. “Even if you get great momentum, you still need that extra jolt to open things up for you a little bit.”