Wrap superstar: Designer Diane von Furstenberg tells her story

Diane von Furstenberg's brand logo is a pair of lips. But when we meet, I am struck by a sartorial touch that could stand for the woman herself. The tortoiseshell reading glasses tucked neatly into her cleavage seem to symbolise the way she has fused intelligence and sex appeal, business sense and glamour to create a fashion business whose wholesale sales will near $200m this year alone.

We meet in her pink-walled private office, halfway up the company's vast headquarters in New York's Meatpacking district. The slightly space-age, minimalist boutique is on the ground floor, press offices – where Von Furstenberg will be hosting a charity play to mark International Women's Day – on the first, the designer's studio and offices on the second, and her apartment, with crystal-shaped skylight, at the top. True to fashion cliché, the employees patrolling the building are a team of no-nonsense, immaculately presented glamazons, who manage to make supposedly convivial questions – "How are you?", "Have you had a nice day?" – sound tinged with sarcasm thanks to brittle manners and New York uptalk. And, of course, when Von Furstenberg slinks into the office where I have been positioned on a sofa scattered with zebra-print cushions to await her arrival, she is fashionably late.

Von Furstenberg rose to fame as a fashion designer and society figure in 1970s New York, when her figure-hugging, jersey "wrap" dress became a cult item, both for the Studio 54 crowd and the Park Avenue set. Over the next 30 years, she saw her business soar, decline and, in the last decade, resurge in popularity, to become the multimillion-dollar fashion empire it is today. This evening, she is dressed in an above-the-knee wrap dress – "I don't really wear other designers any more," she explains – chunky gold jewellery, red-soled Louboutin stilettos and flesh-coloured fishnets. At 62, Von Furstenberg still has what Town & Country magazine attributed to her in 1972: "the sultriness of a biblical temptress". Her allure is due, in part at least, to her natural confidence, and a relaxed acceptance of the ageing process. "I obviously don't feel under pressure to look young, because I have had no Botox or surgery. I don't judge people who choose to have it, but I don't want to erase who I am," she says. As she talks, she crosses and uncrosses her legs, curls and tucks her calves up against her body, and lowers her eyelids in a way that, combined with her direct manner and husky Belgian-with-a-hint-of-American accent, is a disconcerting mix of kitten and tiger.

Accordingly, Von Furstenberg is capable of showing her professional claws. She has sued the cut-price fashion chains Target and Forever 21 for copying her designs, and, as president of the Council of Fashion Designers of America – a role she has held since July 2006 – Von Furstenberg has spoken out on the two most controversial issues facing the fashion industry: the prevalence of underweight models, and the under-representation of those from different racial backgrounds, albeit in the most moderate of terms.

She sent a memo to CFDA members encouraging them to create fashion shows "that are truly multicultural", and she includes more black models in her shows than most designers. But she favours voluntary change rather than legislation, saying: "I think all races are represented in America much more than in many other places, but it's also nice to remind people about that ethnic mix. I would like to see more black models and women from different ethnic backgrounds, but I also think that when you are casting, you just choose the most beautiful girl you can find."

On the vexed subject of size-zero models, she is less equivocal: "The fashion industry has a responsibility to represent a healthy image of women, but to start weighing them and putting them against a wall and making them feel like animals? No."

Von Furstenberg's take on feminism is more pragmatic than intellectual. Asked if she subscribes to a particular school of feminist thought, she says: "Women inspire me... so I enjoy women's stories and biographies. I am interested in all women.

"Our strength has nothing to do with the fact that we can't look good or have good legs, strength is something entirely independent. Sometimes, when people hear the word 'feminist', they think that means looking down on the idea of being feminine, but you can be feminine and feminist. But I do believe in the strength of women and I do believe that women can save the world."

Indeed, female strength – both her own and other people's – is a defining quality for Von Furstenberg. Not only did she build up her business from scratch, but after it crumbled around her in the 1980s when the market became saturated, she staged one of fashion's most impressive comebacks by reintroducing the wrap dress as a core line in the late 1990s. Von Furstenberg had noticed that her daughter and her friends were wearing vintage versions of the dress, and it was reintroduced to Saks department store on Fifth Avenue in 1997. "People say, 'Oh, the wrap dress is over, it's this, it's that', but then, all of a sudden, Demi Moore and Madonna are hosting the hot Oscar party and what are they wearing? A DVF gold wrap dress!

"It is actually more fun the second time around," adds Von Furstenberg, triumphantly.

The source of Von Furstenberg's resilience was her Greek-born, Jewish mother, Lily Nahmias, who died seven years ago. In the spring of 1944, Nahmias was arrested in Brussels and spent 14 months being transported between several Nazi concentration camps, including Auschwitz.

While introducing the play to guests at the Women's Day event, Von Furstenberg recounts how, when her mother had been arrested, she'd tossed a note to her parents in the street that read: "Do not worry about me, I will come back... I don't know where I am going but I want you to know I'm going with a smile." Nahmias, according to Von Furstenberg, "was extraordinary. She survived the camps at the age of 22, she taught me only to look at positive things no matter what happens. When she talked about the camps she talked about the camaraderie. I think she was trying to protect me. She only weighed 49lb when she came out, but I was born 18 months later. I was her victory".

Von Furstenberg was born in 1947, and grew up in Brussels with her mother and Russian-born father, who trained in electronics and became a successful distributor of electronic tubing. She was sent to boarding school in Switzerland aged 12, then to another in Oxfordshire at 15. She went to study Spanish at Madrid University in 1965, and her life changed significantly when she spent a university holiday in Gstaad in the Swiss Alps. It was there that she met Prince Eduard Egon von und zu Fürstenberg, whom she married in July 1969 – she was three months pregnant with their son Alexandre. The couple settled in America and had another child, Tatiana.

Von Furstenberg had no financial need to work, but started her clothing business because she yearned for independence. "I think that is the most important thing for me – and part of that was earning my own money." Her big break came when she showed a selection of garments – precursors to the wrap dress – to the legendary Vogue editor Diana Vreeland, after which a member of Vreeland's staff suggested she set up her business in time for New York Fashion Week.

Von Furstenberg and her husband epitomised the breezy glamour of the 1970s, and their exotic lifestyle, flitting between parties with everyone from Salvador Dali to the Duke and Duchess of Windsor, soon caught the attention of the media. They were immortalised on the cover of New York magazine with the headline: "The Couple That Has Everything. Is Everything Enough?" It wasn't, and the couple split up amicably in 1973.

Von Furstenberg is realistic about the role her jet-set lifestyle and aristocratic name played in her early success. "Oh yes, of course it helped," she says. "I was young, I was a princess, all of it helped, but there were other people at that time who were privileged, and nothing like that happened for them. Come on," she urges, "it's like making a cake, you need the icing, you need the filling – when you miss out one ingredient it's not the same."

Those ingredients rose to delicious perfection when Von Furstenberg "invented" the wrap dress by fusing two of her designs. She saw Julie Nixon Eisenhower on television wearing one of her wrap tops with one of her skirts and decided to combine the two garments in one. The dress quickly became a bestseller; in 1975 she was making 15,000 dresses a week, and was worn by everyone from suburban housewives to Betty Ford and Gloria Steinem. It could be worn to work or on a date, and as Von Furstenberg says: "The wrap dress made women feel what they wanted to feel like... free and sexy... It also fitted in with the sexual revolution: a woman who chose to could be out of it in less than a minute!"

Consequently, the wrap dress came to be seen as a symbol of women's liberation in the 1970s. "It's more than just a dress; it's a spirit," says Von Furstenberg. "The wrap dress was an interesting cultural phenomenon, and one that has lasted 30 years. What is so special about it is that it's actually a very traditional form of clothing. Its like a toga, it's like a kimono, without buttons, without a zipper. What made my wrap dresses different is that they were made out of jersey and they sculpted the body."

Does she think that female designers have a better understanding of what other women want to wear than men? "Yes – we drape more, we use more jersey, male designers don't like jersey. Why do we like jersey? Because we know how it moves with the body. Having said that, my creative director is a man and he understands how women want to dress. It's just that the woman's point of view tends to be a more practical one." And has she ever felt that, because her success was built on one user-friendly dress (although now her collections include a variety of shapes, styles and garments), that she isn't viewed as a "proper" designer? "Some men might look down on the idea of 'wearable' clothes, but that is what I love," she says.

Despite her affinity with women and their fashion needs, Von Furstenberg has described herself as living a man's life in a woman's body, and one expression of this was making the most of women's new sexual freedom in the 1970s. After she and her first husband split up in 1973, she spent much of the decade having lots of affairs – "I am so happy I did." Through the late Seventies, she was a regular at Studio 54, partying with her friends Andy Warhol and Bianca Jagger, and she describes herself then as "Diane the Huntress", with Richard Gere featuring among her conquests.

But it was in the mid-Seventies that she embarked on a relationship with the media mogul Barry Diller. After a while, the couple separated, but they remained friends and married in 2001, becoming one of New York's premier power couples. She explains their out-of-the blue wedding as matter-of-factly as if she were describing a recent holiday, or a trip to her hairdresser: "We met 32 years ago, lived together and fell in love, and then I left him, very abruptly. But he was always there somehow, even though I was having other relationships, and we always thought, maybe, one day, we would get married. It was something we said we would do when we got old. And then one day it was his birthday and I didn't know what to give him – so I said, 'If you want, I will marry you for your birthday.' So we went to City Hall with my children and my brother and we got married."

At this point, Von Furstenberg announces that she must greet her guests. We walk downstairs to the first floor, which has been turned into a boutique-sized theatre-cum-restaurant, with lights overlooking a stage, and chairs around long tables adorned with Morroccan tea lights, flowers and a buffet of the kind of ultra-light finger food that wouldn't prevent anyone fitting into a size-2 wrap dress. This chic Manhattan scene couldn't be further from the lives depicted in the play Von Furstenberg is hosting.

Called Seven, it is a series of monologues based on the stories of real women in the Vital Voices Global Leadership Network, part of an NGO that helps to identify, train and support emerging women leaders and social entrepreneurs around the world. The women behind the stories have all come to the dinner, apart from Mukhtar Mai, who brought to justice the men who gang-raped her in rural Pakistan. Von Furstenberg explains afterwards why Vital Voices is one of her favourite causes: "It's everything I believe in, not patronising, not condescending, not judging. It's helping women to be stronger, with equipment, with legislation, from every angle." She is clearly moved by the play, but unfazed by moving between such starkly different worlds – chatting to the Guatemalan anti-corruption campaigner Anabella de Leon, then making gentle conversation with the super-groomed, many of whom are wearing, what else? The wrap.

"It would be blasphemous to wear anything else," jokes the Sex and the City actress Kim Cattrall, wearing a yellow-patterned take on the dress. "I bought a wrap as one of my first independent purchases when I came to New York, so it's synonymous with freedom," she enthuses. "It's also very comfortable and flattering, and you can dress it up and dress it down." Why does she think that Diane is such an icon? "Look at her – she has the most amazing legs, and she's just so, so... Diane!"

Being "so Diane" has provided the emotional heart of Von Furstenberg's business ever since she appeared in an advert for one of her shirtdresses, seated on a white cube inscribed with the words: "Feel like a woman, wear a dress! Diane von Furstenberg". And it's a role she is now reprising, in the new American Express campaign. It isn't easy to tell where the brand ends and the women begins. True, she welcomes visitors into Furstenworld with stories of her past love life and familiar, tactile gestures (as we walk through the room full of people, she places her hand at the nape of my neck), but is coy, almost to the point of absurdity, on some professional matters. As president of the Council of Fashion Designers of America, she is reluctant to say which other designers she likes, only that: "I love Galliano, but I don't want to say too much because I am the face of the CFDA." Anyone would think that I had asked which designer's creations she would most closely liken to bin-liners.

Von Furstenberg is more outspoken when it comes to her current heroine, Hillary Clinton, to whose campaign she has donated $4,600, the maximum permitted under Federal election laws. "I have a lot of admiration for Hillary," she says. "I think she is really bright, really equipped. I do like Obama, but unless he is the candidate, I will support Hillary. I like her strength, her femininity. When you know her, she is an extraordinary mother, a good wife, she's very compassionate, she really gets things done for people and goes out of her way to help."

But what about her famously abrasive manner, albeit punctuated with timely tears? "She has an air of the girl who is top of the class, and she can come across a bit arrogant, but she really isn't. The nation is ready for a woman president. I think we need one."

And what of her dress sense – especially in the light of Anna Wintour's recent comments that she found it "amazing" that "our only female presidential hopeful had decided to steer clear of [Vogue's] pages for fear of looking too feminine". Von Furstenberg is diplomatic about Clinton's wardrobe. 'Well... she chooses her clothes according to what is the best thing for her body, for her to move and for her to be comfortable. The most important thing is to pick clothes that best express who you are."

It is this attitude that has made Diane von Furstenberg – designer, spokesperson, fundraiser and purveyor of off-the-peg-feminism – a very rich and very well-dressed Renaissance woman indeed. And being so fluent in the vocabulary of branding, it's not surprising that she concludes our meeting with a soundbite that seeks to define the secret of her appeal: "I have yet to meet a woman who is not strong," she says, right on cue. "And if I have any role in fashion, it is to help women express that strength."

The wrap dress: a user's guide

What is it?

It's a dress with two front panels that cross over each other and then tie at the back with two fabric cords or ribbons. The classic version is made of silk jersey, knee-length, and has long sleeves.

Why are they so popular?

They look sexy, but are very comfortable to wear. In fact, wearing one is the closest you can get to going out in a dressing gown.

When should we wear one?

At the office, for work drinks, or for family events that might feature judgemental

relatives, and any event to which the dress code is frustratingly vague.

And when not wear one?

A minority might disagree, but it's not really smart enough to wear to a wedding (unless the wrap dress in question has a very vibrant print), or on the red carpet, or during a state visit to the UK.

Whom do they suit?

Women of most ages. However, as Kate Middleton has shown, the classic wrap can look staid on someone in their mid-twenties – though her kitten heels and pearls certainly didn't help. Generally, wrap dresses flatter curvy, athletically built and even pregnant women; the key to success is having a reasonably toned figure.

Which styles are most fashionable right now?

Floral and tribal prints and bright colours are on trend, as are shirtdresses and safari-inspired styles. Look for seasonal details such as the ruffle neck on the navy, short-sleeved dress available on www.matchesfashion.com/dvfand www.netaporter.com

Are there any potential wardrobe malfunctions?

Choose seam-free underwear and avoid dresses made from cheap fabrics – they will reveal lumps you didn't know you had. Tie the cords tightly and don't wear on windy days, or you risk spontaneously unwrapping.