Ronit Zilkha, Cherie's designer of choice, sees her business go bust

Ronit Zilkha counted Cherie Blair, Cate Blanchett and Julia Roberts among her clients and her boutiques graced some of London's smartest postcodes. But the business that appeared to be booming yesterday fell off the catwalk.

Her chain was placed in the hands of the administrators as debts ran into millions of pounds. Ms Zilkha is no longer involved in the running of the enterprise which once achieved such success.

The fall of the diminutive Israeli – whose 13 UK branches were concentrated in London and the south – has swiftly followed the departure of one of her most famous clients from Downing Street. It was in a Ronit Zilkha brown suit that Tony Blair's wife stood beside him as they swept into power in May 1997 and it was Mrs Blair's patronage with which Ronit Zilkha became most linked in the public mind.

The 42-year-old was favoured by Mrs Blair's confidante and style guru, Carole Caplin, one of whose ex-boyfriends was Ms Zilka's brother, and became one of the "Labfab" designers.

Although the connection with Mrs Blair was said to have done little to help to the business, Ms Zilkha was a favourite with many women, both in the business and entertainment worlds, who appreciated her flattering tailoring and feminine designs.

News that her business has collapsed comes at the start of London Fashion Week and at a time when many fashion retailers are experiencing hard times on the high street, following five interest rate rises and a dismal summer.

Her business, Tight Finish Ltd, owes a total of £3.5m, including £700,000 to trade creditors and other suppliers who are unlikely to get much more back than a few pence in the pound. Stock is being sold off at knock-down rates to retrieve as much money as possible.

The decline has been steep for a designer whose softer clothing proved a refreshing alternative to the stiffer, more masculine fashions during the early 1990s.

After military service in Israel and moving to London to do a fashion degree, Ms Zilka launched her first collection in 1991. Since then she built up a following among several stars, including Kate Winslet.

Her clothes were pretty, understated but with touches of glamour. Typically, they were dresses with floral prints or structured suits with brocade or other feminine touches.

She recalled in a recent interview that she always had firm views on fashion, rejecting the female military uniform during national service in Israel. "I used my Dad's instead because it had lots of buttons and I would wear different belts with it," she said.

"I wasn't in the field, I worked in the College for High Officers and was always in trouble for it, but I wouldn't conform."

As well as her flagship store in Marylebone High Street, Ms Zilka opened outlets in Mayfair, Hampstead, and Richmond in London, and concessions in House of Fraser branches in Oxford Street, Bluewater and Guildford.

In June, she opened a store in one of Edinburgh's most prestigious shopping streets, George Street. She told the press her business had really taken off after Princess Diana walked into the Marylebone store 15 years ago. "There were several customers browsing and everyone's jaw – including mine – dropped to the floor," she recalled. "When the princess left, there was a queue for the changing room she had used."

The reference was unusual because, although she had famous clients, Ms Zilka seldom courted publicity or arranged stunts. "She was never at the heart of the fashion scene," said Iain R Webb, fashion writer and professor of arts at Central St Martin's in London.

"She created a lot of occasion clothes, rather than being fixated on trends or fads or the fashion vine, as it were. She created clothes that were very girly that women wanted to wear with lots of feminine fabrics."

Her latest collection was being billed as romantic, with frills, flowers and antique lace. But, after 16 years, her style seems to have lost its appeal. Her latest audited accounts for the year to the end of August showed losses of £1m on turnover of £2.5m. The company is expected to be wound up within weeks.

In a statement, administrators David Rubin and Partners, who were appointed on August 13, said: "The Ronit Zilkha stores will continue to trade until existing stock has been exhausted and the 60 staff will be kept informed by the joint administrators."