She was one of British fashion’s bright young things who helped to transform the fortunes of the French fashion house Chloé only to turn her back on the catwalk in favour of a quiet family life.

Now, Phoebe Philo, queen of boho chic, is to step back into the limelight after a two-year absence, hoping to recreate her Midas touch as creative director at Celine.

The announcement ends months of speculation over the future of the woman who made Chloé the most-lusted-after label of the moment, and whose take on sexy smocks, stacked heels and breezy blouses seduced everyone from the Sienna Miller set to the high street.

Her range of alpaca ponchos, costing £1,056 a pop, once sold out within 12 hours while her Paddington bag, £750, had gone before it even arrived in stores. In 2004, when Philo was named British designer of the year, her summer collection included a green halter-neck dress that spawned thousands of copies. British women were so in love with the Tesco replica that it changed hands on eBay for more than £50, despite being on the rails for only £19.

Her return is already generating excitement across the industry. Harriet Quick, fashion features director at Vogue, said: “It’s a great appointment for a female designer. The brand that she is joining is a real high-end French brand with a thoroughbred heritage, which has recently had a rather choppy time of it. But it does have a huge potential.”

Critics say that the French house, started by Celine Vipiana, now 88, as a children’s shoe shop in Paris in 1945, has lost its way since the American designer Michael Kors left in 2004.

Philo, the daughter of a property dealer and an art director – her mother worked on David Bowie’s Aladdin Sane album – was born in Paris but raised in London.

At 19, she enrolled at Central St Martins College of Art and Design, where she met Stella McCartney. They became friends and Philo was McCartney’s right-hand at Chloé for four years. They turned the stuffy French fashion label into a successful business.

When she got the top job in 2001, after McCartney left to start her own label within the Gucci group, there were rumours of a fallout as the friends became professional rivals.

In an interview in 2004, Philo said: “The relationship I had with Stella was very deep, so to talk about it in a magazine is not something I want to do. I have a lot of respect for Stella . . . but the rest is private.”

Philo left Chloé in 2006 saying that she wanted to spend more time with her daughter, Maya, now 3. Richemont, which owns Chloé, does not publish sales figures, but that year it was believed widely that Chloé had a wholesale turnover of about £200 million.

Philo hinted at the time that she had fallen out of love with the fashion industry: “Dressing up just doesn’t seem like a good idea now. High heels are definitely out. I’ve been living in my pyjamas.” She added: “It will either be really great to work and have a family, or it will not be so great.”

Averyl Oates, the buying director of Harvey Nichols, believes in the British designer’s ability to turn Celine around. “Phoebe Philo is sure to make Celine say something new,” she said. “Her golden touch was unquestionable at Chloé. She has been sorely missed and so far, no other label has managed to do what she did.”

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