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"She was Auntie Mame come to life – charming, fashionable, slightly absurd – and her style was Hollywood meets Old Money."

Miles Redd, the creative director of Oscar de la Renta Home, is speaking of Dorothy Draper, the long-deceased mid- 20th-century decorator and once one of America's most famous women. Redd, who himself was named one of the world's top 100 designers by Architectural Digest in both of the past two years, is among the group of hot contemporary designers who find inspiration in the grand lady's work, a showy yet sophisticated style known as Hollywood Baroque. "She was the Ian Schrager of her day," Redd continues, referring to the extravagant hotelier. "Almost every hotel she touched became an instant icon."

Dorothy Draper is, of course, one of two Drapers du jour – Mad Men's bad-boy ad exec Don, who is said to have been named after her, being the other. In 2006, the Museum of the City of New York staged a retrospective of her career, igniting a new generation's interest; the likes of Redd, Kelly Wearstler and Jamie Drake all cite her as a key influence. Renowned for her dramatic colour schemes, use of wide stripes and love of floral chintzes, she has become the patron saint of the current anti-modernist swing in design, away from the spare, less-is-more ethos, from form succumbing to function, from earth-tone-heavy palettes otherwise known as greige. As the flamboyant designer once proclaimed, "Why live in a bowl of oatmeal?"

"Dorothy thought Bauhaus was another word for boring," recalls Carleton Varney, a former protégé of Draper's. As a young man in the early 1960s, Varney bought her firm from her, going on to design for clients such as U.S. president Jimmy Carter. Today, his office remains busy, with projects ranging from a palace in Lithuania to the recent redecoration of the Grand Hotel on Michigan's Mackinac Island. The author of a witty biography of Draper, Varney teaches the essentials of her approach in one-day seminars at perhaps her most extraordinary creation, West Virginia's Greenbrier Resort, a massive white hotel with an exterior right out of Gone With the Wind. Inside, long halls accented with vertical stripes lead to her pièce de résistance: the Victorian Writing Room, once called the most photographed room in America.

A descendant of a signer of the Declaration of Independence, Draper grew up in North America's first gated community, Tuxedo Park, N.Y. She was related to Eleanor Roosevelt, and her doctor husband helped to treat Franklin's polio. (Draper and her husband divorced in 1930.) "She was comfortable working in big spaces – the houses she grew up in were huge," Varney says. "Big spaces and projects didn't daunt her at all."

In 1939, Draper was commissioned to decorate Arrowhead Springs, a spa hotel in San Bernardino, Calif. Employing her signature black and white to add drama to the interiors, she then softened the look with broadloom carpets and chenille upholstery. Its opening was a major event: Judy Garland and the Marx Brothers performed to a crowd that included producer Sam Goldwyn, studio boss Louis B. Mayer, actors Gary Cooper and Esther Williams and composer Irving Berlin. "She fit right in in that crowd," Varney says. "She had comparable star power."

After the Second World War started, decorating work began to decline. So when a Brazilian businessman approached Draper to help decorate a massive Bavarian-themed casino hotel in the hills above Rio de Janeiro, she jumped at the chance. The result: the extraordinary Quitandinha Palace, which included a dining-room aviary filled with squawking birds and tropical flowers and a main hall that was outfitted with lip-shaped sofas, featured arabesques in the parquet and somehow made modern the curves of the baroque. "It's no surprise that Gilda comes from the same era," Varney says, invoking the sexy 1946 movie starring Rita Hayworth as a nightclub singer in Rio. "Same period, same look: an American vision of South America."

Like Schrager later, Draper oversaw almost all aspects of the projects she worked on, right down to the matchboxes and staff uniforms at the Greenbrier. One of her dictums – "If it looks right, it is right" – expressed her confidence in her eye.

And her wits. For Draper, there was always a concept – an updated Gold Rush saloon for San Francisco's Fairmont, her own fanciful version of a Vienna coffee house for the restaurant in that city's Mark Hopkins. And there tended to be at least one showstopper in each big project, such as the hot-air balloon lamp that she hung in the lobby of New York's Carlyle Hotel or the phantasmagoric chandeliers in the restaurant of Chicago's Drake.

For its part, the press loved her pithy way with words – both Good Housekeeping and the Hearst newspaper chain soon gave her her own design columns. She would also be interviewed by Edward R. Murrow and photographed by Yousuf Karsh.

"It's a word that should be used sparingly," Redd says today, "but Dorothy Draper was fabulous. Her style, her persona: fabulous."