On a cold, bright Monday in December, Christopher Bailey, the creative director of Burberry, is seated at a restaurant on Piccadilly in London that attracts the great and the good of the capital: Daniel Day-Lewis is a few tables away, and the eatery is a favorite of politicians. But Bailey, 37, hardly looks like a member of the British Establishment. The designer's straw-yellow hair is shorn on the sides, and the top is artfully messy. He's wearing jeans, a rumpled white shirt, and a blazer with a faint pinstripe running through it.

Over lunch he talks enthusiastically about the renovations that he's been working on for the past couple of years. Despite the grim economic outlook, Burberry has invested in a newly opened headquarters in the borough of Westminster, and has entrusted the entire look to Bailey. It's a familiar experience for the designer: Two years ago he embarked on an overhaul of his flat in Green Park, London. Soon after that he refurbished a farmhouse in the north of England, near where he grew up. All three spaces are designed to be as bright as possible, which reflects Bailey's current mood—after a dark personal period he has once again found the light.

"It's quite a realization when you realize you're allowed to be happy," Bailey says. "Something changed in my head. I don't know what it was. I knew I needed to reassess the personal side of my life and I had to find myself again."

This reassessment arose out of grief: Bailey's long-term partner, Geert Cloet, died from a brain tumor in 2005. "It was a very traumatic experience for me, losing Geert in that way, and it took me a long time to deal with it," Bailey says. "I had to be open to being allowed to be happy." After a while his stormy blue eyes brighten and his signature off-center grin returns. "I'm actually happier now, personally, than I could remember," he says. "I'm in love with somebody else."

The object of his affection isn't the point (Bailey graciously refuses to divulge his love's identity); what is important is that a void has been filled, and both his life and his current collection—a cheerful mix of gauzy cardigans, crumpled Panama hats, and lightweight trench coats in earthy colors—are the better for it. Bailey's change of perspective allowed him to continue mining familiar upper-crust-British tropes—the military, regattas, boarding-school sports—while creating something different, fresh, and accessible.

"High fashion, whatever you want to call it, can sometimes feel untouchable and a bit austere and frightening and intimidating, and I wanted the opposite," Bailey says. "I wanted the clothes to feel like there was a little spirit to them."

Bailey was hired in 2001 to reinvigorate a stodgy company known for its traditional trench coat and iconic check pattern. From the moment he was appointed, he understood he had to do more than design covetable modern clothes: He had to reinvent a brand so that it could compete at the highest level of international fashion. If the Armanis and Dolces were identifiable by their sleek Italian tailoring and the Ralphs and Tommys channeled Americana, Bailey would compete in the luxury-goods market by drawing on Burberry's 153-year heritage and tapping the disheveled elegance of British style. The results have been dramatic. The brand is beloved by customers from Russian oligarchs to Japanese schoolkids—not to mention red-carpet fixtures like Sienna Miller, Eva Mendes, and Gwyneth Paltrow. In 2003 Burberry's revenue was $824 million; last year it was nearly $1.4 billion.