Ally bounces back

She was just 12 at the time and was upstaged by older girls sporting the latest fashion accessories of 1968 - cow bells. Why they were called cow bells she doesn't remember, though she thinks they came from San Francisco. "They were bells you hung round your neck on a little string," she says.

Clearly, Ally - she was still Alison Lloyd back then - wasn't fazed by the failure of her first creation to cause a stir. After studying design at York College and Middlesex Polytechnic, she established the Ally Capellino label (capellino is Italian for 'little hat') - and her first range of clothes for Debenhams, A for Ally Capellino, arrived at the High Street store last month.

That autumn range now in store (though not, sadly, in York: the nearest Debenhams branches where her clothes are available are in Leeds) features stripey knits, and the likes of a black mac that matches well with a white shirt decorated with black piping.

The range is going down a storm with Debenhams customers wanting something that little bit different.

"They are very, very pleased," says Ally, 45, who now lives and works in London's East End with her two children Hamish, 17, and Aggie, 12, but whose mum Betty still lives in Tadcaster. "They are well ahead of predictions, and the clothes seem to be going well right across the country, rather than just in Oxford Street."

She's already designed a summer range for Debenhams, and is now working on a winter range that will be seen in the stores next summer/autumn. On top of that, her own range of leather bags and belts are selling around the world - and she recently even created a trendy new look for girl guides.

Busy times indeed - but things haven't always been this good.

In 1999, the design company Ally had built up with her partner Jono Platt - the father of her two children - over more than 20 years went into receivership after a stressful year-long slide into the red, precipitated partly by the break-up of Ally and Jono's relationship.

"Jono and I were splitting up, and we both wanted to go our own way," says Ally. "So we pulled it apart, to some extent. At the beginning, we both designed, but towards the end he got stuck with the business side of it. I don't think that worked that well, because he still had ideas he wanted to work on."

The two now live apart and share the children. Hamish lives with his mum, Aggie with her dad - an unconventional arrangement that works well, Ally insists.

"I think they Hamish and Aggie quite like it," she says. "They don't see each other every day, and when they do they are really nice with each other. The three of us went on holiday to the Pyrenees, and we didn't have an argument the whole time, apart from the 'eat all your greens' type of thing. There was no niggling between the kids. Maybe it's because they are five years apart that helps."

Following the collapse of the original Ally Capellino company, Ally had to 'buy back' the rights to the name. She paid out tens of thousands of pounds for it. "I had to fight a few people off, which was nice," she says, with the odd mix of pride and diffidence that seems characteristic of the way she talks. "Somebody thought it was worth fighting for."

She admits that in a strange way, now that she's running the business single-handedly, she feels freer. And she is quite enjoying managing the business side of things.

"I'm turning into a bit of a dragon," she says, in a tone of voice that could hardly be less dragon-like. I point this out, and she insists I'm only seeing the nice side of her. "Actually, I'm a bit worried that I'm turning into a power freak, because I'm enjoying the business side of things so much."

Debenhams isn't necessarily the department store you'd most obviously associate with Ally's 'look' - a look she describes as 'sensible hippy'. "It's a bit scruffy, but quite classy," she says. "A bit independent and slightly androgynous. It is feminine, but I use a lot of masculine styling." Her clothes, she says, tongue in cheek, are clothes for the 'highly intelligent, stylish woman.'

But given that she specialises in unfussy day wear, while Debenhams are particularly strong on occasion wear, it's not really surprising that after they had made the first approach to her, they appeared slightly cool.

They were won over, however, after Ally had put together a few sample garments. She began working on a line for the store, re-thought it, scrapped it, and started again - and the rest is history.

It's not surprising that her clothes should have proved a hit at Debenhams. Unconventional and not perhaps quite in the normal Debenhams mould they may be, but she says she's always insisted on quality, and on producing clothes that are comfortable to wear.

"They all fit very well," she says. "I always try things on and make sure they are comfortable. People are always saying things like 'I've had this 15 years and I'm still wearing it.'"

Her inspirations, she says, come from looking around her, seeing what's new, and thinking about how to re-interpret fashions from a few years ago. All these influences are then interpreted in the light of her own 'look'. Plus fashion goes in trends, she points out: trends that get more and more extreme until there is a complete break. "Short skirts that go up and up until they have to go down again, trousers that get wider and wider, waists that get lower and lower."

Because designers are usually working a year ahead, the trick is often to second-guess what will still be hot a year from now. Debenhams, for example, wanted her to create a line of Victorian ruffle-necked garments for next summer. She resisted. "They have already had their day. I think by next summer people won't want them any more."

She says she loves being a designer - and insists the fashion world is not as vapid and self-regarding as it can seem.

"People think of it as everyone swanning around in parties all the time. You can do that - but even those people work like stink," she says. "There's also this view of the fashion world as people who only think about what things look like - but actually there are a lot of really nice people.

"I think fashion is really exciting. Yes, on the one hand it is complete vanity. But it is very important to people - and it is very important to the economy too."