The last time style expert Charla Krupp saw Isaac Mizrahi, in February, she brought him a fashion relic from the 1980s to see if he could make it wearable again. In a webisode for IsaacMizrahiNY.com he grabs the black bolero jacket with padded shoulders and starts riffing on its potential.
 
"You know what, this is coming way back, very fast darling, this '80s thing," Mizrahi says. "I think the shape is not so bad…I'll reinterpret it—she won't recognize it by the time I get through."

He is now attempting the same kind of reinvention on an $870 million brand. In January, Liz Claiborne hired Mizrahi away from Target to become the new creative director for women's apparel, accessories, and licensing. Claiborne C.E.O. Bill McComb hopes Mizrahi's touch will awaken Liz from the extended slumber of dowdy, forgettable styles and make the brand back into a wardrobe essential for fashion-conscious working women.

Shoppers won't see the results until February, but fashion insiders are atwitter about his first collection's summer debut to the industry, featuring trendier, more feminine looks. Mizrahi will show his upscale spin on handbags and jewelry under the Claiborne brand in August, following up in September with women's clothes, according to transcripts from Claiborne's earnings conference calls and investor presentations. The stakes are high for his runway show, expected during September's fashion week. In addition to proving he can master another famous designer's legacy and make it relevant for today, Mizrahi must help a money-losing brand and corporation rebound.

"No one was buying Liz. Even my generation [would have to ask], Who is Liz Claiborne, again? We don't know who she was, we don't know her history," says Krupp, author of How Not to Look Old.

Influenced by classic American sportswear icons including Norman Norrell, Mizrahi is known for flattering, retro looks. His design flair and notoriety from a Style Network show, off-Broadway show, and his 1995 movie Unzipped (see an interactive timeline of Mizrahi's career), are good starting points. The brand that makes up one-fifth of Claiborne Inc.'s $4.6 billion annual revenues desperately needs both. For too long, Liz has served up yawn-inducing basics like the polos, crew necks, and cropped linen pants now on sale on its website. After years of decline, in 2007 Liz suffered its worst full-price sales record in the label's history, necessitating aggressive liquidations that helped push Claiborne Inc. into the red. The company's stock has dropped as low as $15.28 a share, from a 52-week high of $38.90, and earlier this month Standard & Poor's slashed its rating on Liz debt to junk status. Mizrahi and Claiborne officials declined to comment to Portfolio.com. But it's clear that as McComb tries to engineer a companywide restructuring, he's banking on Mizrahi magic to help Claiborne generate profits by making clothes women want.

"We need to convince the consumer," said McComb on the fourth-quarter earnings conference call on March 14. "We need to leverage all of the marketability and buzz factor that Isaac can bring."

In the '70s and '80s, Liz Claiborne offered droves of women just entering the workforce an alternative to suits inspired by menswear. She created affordable, pretty separates that busy working women could easily combine into different outfits. To bring back that practical femininity, Mizrahi must pull off three feats: First, he has to translate the design skills he's proved at the high end, with his couture lines sold at Bergdorf Goodman, and low end, with his $420 million Target business, to a crowded middle market. Second, à la Karl Lagerfeld at Chanel, he has to concoct a clever mix of history and one of fashion's holy grails, "newness," channeling Liz's legacy of affordable ensembles while making the collection exciting for 21st-century women. Lastly, he must live up to his hype with hits—quickly—or Liz will lose more of the retail floor space it's barely hanging on to now.

"From the consumer's perspective, he's got two seasons," says Marshal Cohen, chief industry analyst at trend-tracker NPD Group. "If you don't hit a home run within spring or fall, they don't have that long of an attention span."

Sources say Mizrahi will be remaking Liz with colorful clothes that combine femininity and professionalism. That's what he's done at Target for the past five years, producing stylish takes on work-appropriate coats, dresses, and suits, like the flared, box-pleat jacket with a Peter Pan collar, and the lipstick-pink retro shirtdress featured this spring.

"Liz Claiborne, what they've done in the past doesn't come across as particularly feminine," says Roseanne Morrison, fashion director at retail-trend forecaster and consultant Doneger Group. "What Isaac has done had a certain mood, and hopefully he will translate that for Claiborne."

As the first creative director to oversee the entire Liz Claiborne brand for women since its namesake founder, Mizrahi is regarded as the company's best hope to restore its heritage. The legendary Liz Claiborne retired in 1990, and died last year.

"Liz needed a big persona and big shot in arm," says Krupp. "And if it doesn't work with Isaac, call it a day."