In 2008, at the peak of the financial crisis and with the disappointing sales figures of his last collection hanging over him, Los Angeles-based fashion designer Gregory Parkinson went for broke, using rare fabrics from his archive to create his most spectacular collection to date.

Presented in actress Shiva Rose’s garden one spring afternoon, the sexy, off-the-shoulder blouses, long floral skirts, pretty sleeveless dresses and chic metallic tunics drew comparisons to Yves Saint Laurent’s Ballet Russes collection and the luxe hippie style of Zandra Rhodes. The event was a triumph, and it taught Parkinson an important lesson that he lives by today: “Never play it safe.”

Parkinson’s label is one that has weathered and perhaps even thrived through the economic downturn that delivered a blow from which the fashion industry is only now rebounding. In Los Angeles, numerous boutiques closed and the city’s fashion week unraveled, but Parkinson was among a few nimble designers who adjusted to the demands of a new reality.

The British-born Parkinson learned that in a market dominated by status brands with ludicrous price tags, a new kind of customer was emerging for whom quality, craftsmanship and originality had more value than

logos. And the more he has allowed his unique sense of color, fantasy, opulence and ease to come into play, the more his star has continued to rise.

Last June, 16 years after launching his line, Parkinson was chosen as one of 10 finalists in the Council of Fashion Designers of America/Vogue Fashion Fund, which helps “emerging” designers grow their brands. Although Billy Reid, Prabal Gurung and Eddie Borgo won the competition, Parkinson believes he may have gotten more from the experience than anyone.

“Everyone says it’s not about the winning, and up until the point when the winners are announced that’s not true,” the soft-spoken designer said with a smile, sipping tea at a bold yellow dining table in his downtown L.A. duplex. “It is about the winning, and then in retrospect, it really isn’t. To get such great exposure from the CFDA and Vogue introduced me to a whole different audience and reintroduced me to my existing customers.”

That exposure continues: Parkinson learned Thursday he is one of 10 former Fashion Fund finalists selected to participate in a shared showroom in Paris in October, as part of a new fund initiative to help young designers gain more international attention.

Tastemakers and fashion insiders have been devoted to Parkinson for years. His designs are sold in Barneys (which is exclusively carrying a new line of beach bags this season). And retail legend Linda Dresner — who stocked John Galliano, Commes des Garçons and Jil Sander in her boutiques when they were unknowns — has bought every collection.

But the Fashion Fund, with its implicit stamp of approval from Vogue editor Anna Wintour, offered a platform to relaunch the Gregory Parkinson brand after he and his longtime partner Therese Tran decided to lower their prices. (During the economic downturn, “it was the only way we could compete,” he said.)

Already burning the midnight oil at their fashion district studio every season to make samples (Tran cutting, Parkinson sewing), they changed construction methods and cut down on overhead, without sacrificing artistry. And now an average top retails for $200 to $400, instead of up to $800. This kind of flexibility is one of the advantages of being a small business, and, needless to say, the buyers didn’t complain.

In stores now, the spring-summer 2011 collection that Parkinson presented to Fashion Fund judges — including Wintour and J. Crew’s Jenna Lyons in New York last September, and again in October at a star-studded fashion show here at the Chateau Marmont — is an explosion of color, pattern and texture that belies its simple, wearable silhouettes. Animal prints are paired with patchwork florals, layers of multicolored tie-dyed silks are cinched with polka-dot belts, and some pieces are dip-dyed just at the hems, creating a continuous color spectrum from head to toe.

“They’re so luscious, it sort of makes you think of ‘A Midsummer Night’s Dream’ or something,” raved Susan Stone, owner of the Santa Monica designer boutique Savannah, which has long carried Parkinson’s clothes. “His technique has evolved to a very sophisticated level.”

That sophistication didn’t escape the eye of Ikram Goldman, who picked up the spring collection for her Chicago store and promptly put her most celebrated client, Michelle Obama, in a fuchsia leopard-print skirt trimmed with purple. Obviously, it’s an honor and a coup for any designer to dress the first lady, but for Parkinson it’s also confirmation that he can connect with that new customer. “For all the women who think ‘I can’t wear this,’ to see it on somebody like Michelle Obama, it’s like, ‘OK, maybe I can wear it.'”

The designer was raised near Manchester but was shaped by the music and fashion of punk London. He credits his English upbringing for his carefully crafted yet unorthodox approach. “The thing that appealed to me the most about punk was the way you could dress,” he said. “Everything was homemade, and you could put yourself together in an incredible way,” he says. “I think it has to do with our colonial heritage, stealing styles from different cultures and mixing them.”

Parkinson has done plenty of his own cultural collaging, drawing inspiration from Pablo Picasso, X-ray Spex, Commes des Garçon and Truman Capote in his youth. (Literature is such an important influence that he personally selected a different book to give to each of the 10 Fashion Fund judges.)A job offer and a plane ticket brought the fashion school grad to America 22 years ago. The promise of blue skies and affordable manufacturing eventually led him from New York to L.A., where he opened a store on Beverly Boulevard in 1994. (Today, Parkinson noted, a young designer would simply launch a website.) People such as stylist-turned-fine jeweler Liseanne Frankfurt and handbag designer and editor Kendall Conrad wandered through the shop’s doors. Both women remain his close friends and some of his best walking advertisements for the brand.

Tran, who was then working in the shoe department of Barneys, also came into the store back in ’94. “I remember being extremely impressed and floored,” she recalled. “I totally gravitated toward his vision…. It was similar to mine.”

Within a year, Tran became Parkinson’s full-time assistant, and today she’s his business partner and right-hand woman. When Tran got married last year, Parkinson, inspired by Chanel’s couture workshops, stitched her cream lace wedding gown by hand; the process took five days. Is it any wonder women have such an emotional response to his clothes?

Katherine Ross, Balenciaga’s U.S. brand consultant, is another admirer who expressed her support for “Team Gregory” at the Fashion Fund finalists’ dinner in October, wearing a periwinkle dress with black appliquéd lace that stood out among the many cocktail frocks at the Chateau Marmont.

“I adore Gregory,” she said. “His sense of color and bohemian-chic style allow me to express my more artistic self.” Ross added that she wore another Parkinson dress for a Vanity Fair photo shoot celebrating the new Lynda and Stewart Resnick Pavilion at LACMA, where her husband Michael Govan is director. “Everyone at the shoot asked me what I was wearing. I said, ‘it is Gregory Parkinson — made in L.A.'”

Recently nominated for a National Design Award from the Cooper-Hewitt museum, Parkinson describes his fall 2011 collection, shown at Milk Studios in New York in February, as “a pastiche of what I think evening wear should be”: luxurious, voluminous garments crafted from formal fabrics that have been “beaten up a little bit” — brocade jackets bleached to reveal their textures, patterned silk blouses overdyed in rich blue and violet hues, pieced-together taffeta skirts printed with lace designs. The critics gave it raves. The Los Angeles Times’ Booth Moore deemed the collection “superb,” and’s Nicole Phelps noted that “the models even said they felt like princesses.”

Parkinson says that he’s lucky to count many glamorous women among his clients, but, unlike most designers today, he has zero interest in courting celebrities. He finds red-carpet dressing “dated” and Hollywood “distracting.” Instead, he directs his energy toward projects such as an upcoming collaboration with Chicago’s Field Museum and Peruvian artisans. He is also talking with Anthropologie and Calypso about doing capsule collections for them.

The goal is to be inclusive, both philosophically and artistically. “If you think you’re just dressing a certain type of person it’s really limiting,” Parkinson said, “but if you think you’re making clothing that can be worn by everybody, that’s really exciting.”