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.