Tartan cover, scratch'n'sniff pages - this must be Nest

A team of seamstresses has been hired to transform two rooms in Sir Terence Conran's Great Eastern hotel into what Joseph Holtzman gleefully describes as "tartan hell". "We are covering these tables, you won't recognise them, they've given us permission to wallpaper these panels, the light fittings..." he winces, they are clearly not to his taste, "you won't see them either."

A team of seamstresses has been hired to transform two rooms in Sir Terence Conran's Great Eastern hotel into what Joseph Holtzman gleefully describes as "tartan hell". "We are covering these tables, you won't recognise them, they've given us permission to wallpaper these panels, the light fittings..." he winces, they are clearly not to his taste, "you won't see them either."

Holtzman, who is himself sporting tartan trousers, has been aided in his task by Vivienne Westwood's donation of bolt after bolt of gloriously coloured tartan, which is being worked on in a tiny bedroom-turned-sweatshop. The feverish preparations are for a party to be jointly hosted by Westwood and Holtzman to celebrate the publication of the autumn issue of the cult US interiors magazine, Nest, which this season has tartan as a theme. The party is also intended to give the magazine a UK launch.

Holtzman, 43, is the founder, editor-in-chief and art director of Nest, a quarterly magazine launched in 1998 which, despite an international circulation of only 75,000, is widely considered to be one of the most groundbreaking, best designed and "directional" style titles on the newsstands. Take this latest issue. Which other homes magazine would offer the late Liberace's Las Vegas compound, the living quarters on a Trident submarine, the home of an adult baby, the Rothschilds at Waddesson Manor, and a very contemporary makeover of an Edwardian mansion? Yet all of these homes are brilliantly designed. This is a magazine about individuality, not about freaks.

It's no surprise that this celebration of great design attracts all the top advertisers - Versace, Gucci, Prada, Jil Sander - or that the magazine was winner of the General Excellence category for a publication selling fewer than 100,000 copies in the prestigious US National Magazine Awards. More surprising is that until launching Nest, Holtzman knew nothing about magazines.

"I was helping the photographer Derry Moore do a book and he said, 'you should be an art director'. I thought, 'I'm going to start a magazine'. I rented a studio apartment in New York, bought some Ikea tables, and just began. I had literally spent the previous five years decorating my apartment in Baltimore and doing some teaching, but I hadn't had any training as a graphic designer, I couldn't even switch on a computer." He did have one thing on his side for becoming an interiors editor - Holtzman fears crowds and so doesn't like to go out.

This lack of magazine experience allowed Holtzman to create a magazine that was distinctive, witty and too personal for big publishers to ape. He made up his own rules, ignoring industry standards.

Holtzman imposes a ratio of one-third advertising to two-thirds editorial (unprecedented on quality US magazines); he declines all adverts he judges ugly; he places all advertising at the front or back of the book, allowing none between his run of features; the use of different paper stocks is banned; and he never tolerates advertisers who ask for their products to be featured in return for their custom. This high-minded streak - combined with the use of top-grade paper - costs. Nest sells for $12.50 (£7.95 in the UK). "But I think I am offering the reader something of value," he says. Readers seem to agree: sales grow every issue and he is within sight of breaking even.

Holtzman elected to have just one person commission the copy, a literary editor called Matthew Stadler to whom he gives free rein - Holtzman admits that he often sees the words as grey stuff that goes next to the pictures and personally worries more about the picture captions. As the magazine's circulation has climbed, he has also gone against the grain by employing fewer and fewer people and taking more of the decisions himself. The whole operation is still run from the studio apartment he rented three years ago.

Holtzman also has an accountant, whom he is slightly scared of, and a "graphics director" called Tom Beckham. "I still don't know how to use the computer. The other weekend I wanted to show someone something and I couldn't even turn it on. It's really frustrating if I have an idea and Tom's not there."

At heart, Holzman is a cut-and-paste artist. Again, this has made Nest stand out from the competition, as has another Holtzman device - the use of patterned backgrounds on his stories. In the new issue, he places many of the pictures on tartan cloths. There's even a sequinned Liberace tartan.

Nest addicts enjoy looking out for surprises, such as the cover which you had to design yourself using a sheet of stickers, or the one which had models sporting swimsuits designed by Todd Oldham that could be scratched away to reveal their naked bodies. The new issue comes in a transparent zip bag - a play on the plastic slipcovers placed on sofas. Holtzman admits that many people may fail to understand his highly referenced aesthetic, but he doesn't worry, professing himself to be "after a higher IQ level than circulation". His boutique operation offers lessons for many large UK publishers. After a summer of their lacklustre style and fashion launches, Nest shows the impact that having a maverick at the helm can have.

Things only go wrong when Holtzman takes other people's advice. "We did this disastrous mail-out to potential readers. There was this letter which I refused to sign because it was so bad, and then 100,000 copies of the magazine. People thought they had been sent smut. They were the wrong people. It was terrible, things have to grow organically." That's what his UK launch will assist, by placing the magazine in the hands of stylish opinion-formers.

The only concern has to be: will the shy, crowd-fearing Holtzman actually be at his own party? "Oh, yes," he says unconvincingly, clearly delighting in the preparations but dreading the mob's arrival, "I just may have to go outside every now and then."