GARDEN GROVE, Calif. — What started as a shopper’s passion has turned into a new aesthetic and potential retail opportunity for Three Dots.

This story first appeared in the May 6, 2009 issue of WWD. Subscribe Today.

Under recently named creative director Pegah Anvarian, who confesses to being fixated on Balmain’s rock-chick looks, Three Dots is moving out of its comfort zone of basic T-shirts into a trend-centric arena pioneered by Balmain’s extreme shoulder pads and harem pants.

The 14-year-old label is getting noticed by influential specialty retailers such as Los Angeles-based Desiree Kohan, who is buying Three Dots for the first time to mix with Viktor & Rolf suits and Sophia Kokosalaki skirts at her directional boutique, Des Kohan. In particular, Kohan liked Three Dots’ $75 open-neck T-shirt accentuated with quilted shoulder pads.

“That’s superhigh fashion, but it’s an acceptable price point,” said Kohan, who got to know Anvarian when her shop sold Anvarian’s namesake label, which ranked among the top three brands in terms of sell-throughs, because her clothes fit a broad audience. “Now that it’s at an even better price point, we expect to do well with it,” Kohan said.

Working in Three Dots’ 70,000-square-foot factory, surrounded by manufacturers of gas cylinders and shipping containers in this city 28 miles south of Los Angeles, Anvarian channels her love of luxury labels into her designs. For her second collection to be sold for the holiday season, she evoked Chanel in a gray collarless cashmere-wool cardigan trimmed with ivory hammered silk. A matching miniskirt trimmed with a zipper in the front owes its tight fit and sexiness to Azzedine Alaïa. Anvarian also plans to introduce a black-and-white leopard print electrified by drops of neon green and purple and more hardware details to differentiate the clothing.

“You can make a garment look more high-end by having the hardware, especially removable hardware so that you can wear it in three different ways,” Anvarian said. “Especially with the economy, people want things you can wear different ways.”

Longtime customers of Three Dots give Anvarian a vote of confidence. Betty Lin has been stocking the line ever since she opened her namesake contemporary and designer boutique in Seattle five years ago. With the fall lineup of cardigans, which retail for less than $200, she said Anvarian is taking the company in the right direction.

“She’s breathing new fashion into a basic line,” Lin said.

The change couldn’t have come at a better time. Three Dots generates annual wholesale sales of about $35 million through almost 2,000 points of sale in the U.S. and retailers in Japan, Italy, Austria, Germany, Greece and Saudi Arabia. In the midst of a recession, the 185-employee company faces entrenched rivals, including Splendid and James Perse. It also must fend off new competitors such as T by Alexander Wang; Kowboys, the Los Angeles-based start-up backed by J Brand; Blue Life, which was cofounded by retailer Ling-Su Chinn of the Planet Blue chain; and twen-tee, which was launched this spring by former Three Dots executive, David Lazar.

Even with the makeover administered by Anvarian, Three Dots tries to ensure that 70 percent of its styles retail for less than $100. The priciest item is a double-breasted ponte jacket selling for $298.

“The price point is important,” said Sharon Lebon, president and chief executive officer.

Anvarian joined Three Dots in November, after shuttering her namesake line three months earlier. She succeeded Yuchin Mao, the former Helmut Lang designer who left the company last February. In addition to designing the women’s line, Anvarian oversees the men’s business, which Three Dots is reintroducing in the U.S. and Europe after a yearlong hiatus. The designer also expanded Three Dots’ array of bottoms into $115 tapered harem pants, $132 jeanslike cotton leggings and $168 double-layered Tencel skirts accentuated with shirring on the side.

“We have more opportunities for complete outfits,” said executive vice president Sarah Angell.

Another practicality that Anvarian considered is deliberately designing cardigans, jackets and other pieces that a customer can try on right in the middle of the sales floor without needing to enter a dressing room. Speaking like a seasoned shopper, Anvarian noted, “It’s a quick sell for the store and instant gratification for the customer.”