Despite a slowdown in sales and profitability in 2008 as business toughened, particularly in America and Japan, Dior cited good momentum in its own store network, which numbered 237 at the end of 2008.

Toledano said Dior would open about 10 locations this year with a focus on emerging markets: China, the Middle East, and Russia, where he said business in the firm's own stores is holding up and new units are slated for Saint Petersburg and Ekatrinaburg this year. All the new units are based on the luxurious, 13,000-square-foot Paris flagship, refreshed and enlarged by architect Peter Marino in fall 2007, boasting silk carpets hand-woven in Tibet, fitting rooms wallpapered in embossed leather, 56 discreet shades of gray and Louis XVI moldings.

The "haute" retail environment is "working really well in emerging countries," Toledano said, showing photographs of recently opened new-look boutiques in Macau and Shenyang in China and New Delhi in India.

Most of the new units are larger, ranging from 5,000 to 10,000 square feet, and showcase a range of products, including women's ready-to-wear, leather goods, fine jewelry, menswear, and all manner of accessories. "We want to show more of the universe," Toledano explained. Coming soon is an 8,000-square-foot unit in Dubai—a vote of longer-term confidence in an area hit by an economic meltdown.

As reported, Dior has exited the logo and accessibly priced business as the company pursues its upscaling drive, which impacted 2008 sales. Products that are too short-term, fashion-driven, and "too attractively priced" can "betray your client base," Toledano said. "Our average price has increased over the past three years. Even 2008 versus 2007, there was an increase in prices, but due to an increase in value: the quality, the leather, the details."

The Galliano era at Dior has been marked by some of fashion's most fantastical moments, from Pocahantas couture arriving on a steaming locomotive to wild, rockabilly ready-to-wear with linebacker shoulders. More recently, Dior's New Look has been more demure, exemplified by French First Lady Carla Bruni-Sarkozy, who has worn comparatively prim suits, dresses, and coats for important state functions, including a visit to the U.K. last year that prompted a torrent of international media coverage and comparisons to Jacqueline Kennedy.

Toledano said the new fashion direction was "not to calm down, but to put the pedal to the metal on the Dior codes."

In this aspect, he describes Galliano as a "gold mine. He's the perfect designer to interpret that. Dior is not a black box. Dior is an open universe and someone like John can really interpret it. This is the role of John, to bring all this newness."

He said the new fashion direction has been a commercial success, particularly in Europe, in both couture and RTW, and has fanned the loyalty of its customer base. "More and more women are coming each season to Dior to do their wardrobe," Toledano said.

Galliano, couturier at the house for more than a decade, said he has absorbed Dior's DNA, and "even after all this time, it remains endlessly inspiring, exciting, and unexpected. Mr. Dior was a genius, I am in awe of what he created and only hope I can add and enhance this legacy," he said. "This is a credit, not a creative, crisis. Our clients still want fashion, still want to be inspired. My role, now more than ever, is to dress their desires. Right now fashion should be a morale booster, escapist, excellent, and constant. Now is the time to invest in luxury, quality and excellence."

In tandem with the emphasis on iconic, upscale products is a shift in communication, with "less seasonal" campaigns like the Cotillard one coming to the fore. According to Toledano, advertising needs a story and strong brand elements to stand out from the crowd. "People are looking for real communication," he said. "What is this brand telling me?"

Dior's stable of celebrity pitchwomen, for fashion and beauty products, includes Charlize Theron, Monica Bellucci, Eva Green, and Sharon Stone, and the house continues to rack up high-impact red-carpet moments, most recently with Sarah Jessica Parker in a white couture confection at the Oscars.

"Dior is not an apparel vendor; it's not a bag vendor or a shoe vendor. This is why it's so close to the movie industry," Toledano said. "These actresses are showing the dream through Dior…this dimension of dream, glamour, and elegance."

Having famous women wearing Dior, from royals and political figures to celebrities, is not meant to achieve a short-term impact, but to feed the brand's momentum and "add more substance to the story of the brand. It's a long-term process."

For his part, Galliano said it's time to excel and push Dior and himself further.

"Dior was a house born post-war. It created a New Look that lifted morale and made women beautiful again," he said. "I want to continue the legacy, to continue the dream and create modern beauty, luxury, and new objects of desire. We need beauty, inspiration, creativity—and in downturns, it is my role more than ever to inspire the dreams of women."