Few fashion designers profess to embody the modern spirit of womanhood quite like Diane von Furstenberg, and few people are fonder of reminding women of this fact than the designer herself. "Listen," she purrs, "my whole philosophy is to empower women and celebrate their freedom. And it always has been."

Decades at the helm of a clothing empire (recently valued at $200m) have yielded collection after collection with names such as Working Girl and Femme Fatale. Her signature 1970s wrap dress was designed with the New York working woman in mind, and encapsulates her knack for making practical clothes look glamorous. So what happens when the self-proclaimed woman's woman turns her hand to designing clothes for kids?

This month, DVF will launch her second collaboration with Gap Kids. As with the first one, this range features animal prints, primary colours and African batik-influenced patterns. "It's very simple," the 66-year-old says of her designs. "It's fun, it's colour, it's, 'Oh, I want it because it's so cute', but then it's got to be super practical and super flattering, so that the mothers love it and the children adore it."

Refreshingly, the Gap Kids range does not try to dress children up like mini adults, nor does it swathe them in kitsch designs. Equally no-nonsense are the prices: leggings £9.95, dresses £19.95, jackets £34.95.

As a mother of two and grandmother of four, von Furstenberg has spent most of her life around children. "My children came to fashion shows with me," she says. "It was part of who I was."

Born to Jewish migrant parents in Brussels in 1946, the former Diane Halfin studied economics in Geneva before going on to work as a fashion assistant in Paris and at a clothing factory in Italy. She married Prince Egon von Furstenberg in 1970, when she was 24, and began designing clothes under her married name soon afterwards. The wrap dress, which hit shops in 1972, sold in millions and in 1976 Newsweek declared Von Furstenberg "the most marketable female in fashion since Coco Chanel".

Diane von Furstenburg, shot at her Paris apartment: 'My children came to fashion shows with me. It was part of who I was.' Photograph: Patrick Swirc

When her company's fortunes took a dip in the 1980s, Von Furstenberg sold off company assets and seemed to disappear from view. "My brand meant nothing," she was quoted as saying. "I had become a has-been." Sex And The City contributed to a DVF revival in the late 90s. Not only did Carrie Bradshaw wear it, but the wrap dress symbolised the cocktail feminism espoused by a certain type of woman of that era. Von Furstenberg seized her moment and relaunched her clothing line in 1997.

She gave up her princess status following an amicable divorce from her first husband, but Von Furstenberg is everything you expect from European royalty: connected, philanthropic, tanned. She rubs shoulders with Oprah Winfrey and Hillary Clinton. She married billionaire TV executive Barry Diller in 2001 and regularly holidays on his boat, the Eos, the world's largest superyacht. Asked how she celebrated her 66th birthday, she responds smoothly: "I was born on New Year's Eve, so the whole world celebrates my birthday."

Von Furstenberg is widely regarded as one of the most likable, approachable designers around, because she possesses none of the hidden-behind-sunglasses haughtiness one associates with some of fashion's main players. Which is not to say that she can't be a lioness when it comes to her label. Last year, she dispensed with her creative director, Yvan Mispelaere, because, "although I love him and he did an incredible job, I realised that my brand has so much of my personality and that's what the consumer wants". Cue the brisk return of animal print, suede and shoulder pads.

It was her granddaughter, she says, who warned her not to leave designing duties to someone else. "She said, 'Be careful, DD' – that's what she calls me – 'you don't want to lose your signature.' And I always listen to my grandchildren. One must not condescend to young people. They have many smart things to say."

• DVF for Gap Kids opens on 25 April.