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Walk into Courtney Love's Beverly Hills residence, a "guesthouse" of San Simeon proportions, and she immediately directs you to her closet. "Go check it out," she says with a wave of the arm. "All of the size 8's are gone." Thus instructed, head downstairs into Love's bedroom, a Norma Desmond–style boudoir filled with porcelain dolls, massive crystals, Helmut Newton photo books, fringed lamps, two guitars, a large television playing a quiz show on BBC America...and wait.

A few minutes later, she barrels down the stairs and into the walk-in closet, explaining all it contains in a warp-speed monologue. "This side is sporty," she says, cigarette in hand, taking a sharp turn and pulling out all of her Rick Owens jackets, various tees and tanks, and a plethora of skinny jeans. Over a chair hangs a Giles Deacon bag covered in fist-size gold studs. "[Stylist] Katie Grand got it for me," Love says with a lucky-girl smile, opening the bag to reveal a similarly intimidating pochette. "Just try to mug me [when I've got] this. Ha." Then, off to the girly side, where a wall of shoes lives — Chanel heels, metallic Miu Mius, and rare sparkly red Salvatore Ferragamos — alongside Dolce & Gabbana dresses, tiny Azzedine Alaïas, Vivienne Westwood and Chanel suits, Lanvin ("I collect Alber"), vintage Biba, and Chloé ("my daywear, my momwear, my in-real-life favorite"). Tucked away in one corner are two exquisite Victorian lace dresses, customized in Love's rock 'n' roll Lolita style, which represent the first pieces of a new lingerie-inspired label she plans to launch next year with L.A. designer Claire La Faye. "It will be called Dirty Blondes or Never the Bride. We don't know yet," she says. And then, on the left, the big, empty rack where those size 8's used to hang.

If cleaning out the closet is an all-too-obvious metaphor for where Love, 43, is right now, it's a singularly appropriate one. She's been on a mission since she was "out sick," as she half jokes about her last stint in rehab nearly two years ago, and she's amping up for the upcoming release of her long-awaited solo album Nobody's Daughter. "It's the first time I've written sober," she says, "the first time I've written from a really deep, dark place."

Also, as any reader of tabloids and/or Love's no-holds-barred blog knows, she has lost some weight recently. She looks good — very good. Today she is wearing a silver Vanessa Bruno minidress and black camellia-embellished Chanel stilettos. Her hair is newly styled in a Julie-Christie-in-Shampoo bob. She takes a seat on her bed, hits a buzzer for a Nature's Best Isopure shake ("It's vanilla. Taste it. It's fantastic, like Dairy Queen"), lights the first of many cigarettes, and starts to talk.

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We're here, ostensibly, to discuss what shall henceforth be named L'Incident de Chanel. Earlier this year, Love and her daughter, Frances Bean Cobain, attended Paris Hilton's birthday party, Love wearing a black minidress with a white fringed appliqué on the front and matching fingerless gloves that an assistant had found for her. The dress was, in fact, a knockoff of a Chanel couture piece — "a Canal Street fake" — and Love had no idea. The fallout was swift: The dress hit the press, word reached Karl Lagerfeld at the Chanel atelier, and one miffed couture client who had ordered the original promptly canceled it. Love was mortified. "I wrote Mr. Lagerfeld a letter, an in-depth apology," she explains, clearly still embarrassed. "I offered to pay for the dress, throw him a party, do whatever I needed to do to make up for this horrific thing." Mr. Lagerfeld himself is more sanguine: "Poor girl, she had never seen a real couture dress. Someone made her believe it was the real thing. It's not her fault; it's the fault of a horrible stylist!"

Their rapprochement, captured on these pages, was shot in Paris in Coco Chanel's apartment. So what were the differences between the knockoff and the real thing? "Oh, my God, massive," Love says, sighing. "First of all, the glovelets. Mr. Lagerfeld had made his out of eagle feathers with black elastic. Mine were spandex and marabou." She pauses for effect. "On the real Chanel, there was also a masterful and distinctive print. Oh, and there was a label in the Chanel one and not in the other." The iconoclast soon rears her head, however: "In a way, it's insanely subversive, because I don't think anyone has done fake couture before. But honest to God, I did not know. I hope it was burned." (Love's assistant, for the record, was also burned: She was promptly fired.)

Love is Lagerfeld's number-one fan. "I really connected with Karl in a way that I didn't think I was going to," she continues. "From the ponytail to the image and the persona, I didn't think we were going to click, but I ended up genuinely and sincerely liking the man." Love left the shoot for the Eurostar train wearing little but a Chanel lab coat and a black boater. Now she runs to grab the hat and models it coquettishly. "Look at this hat," she says. "Isn't it fantastic? It's literally Coco."

"She reacted in such a nice way [to the clothing]," notes Lagerfeld affectionately. "It's because of her being — her freedom, her sweet wildness — that this happened. She was the victim in this story."

The irony that Love is coming back into fashion — once again — is not lost on her. "The fashion world, they don't trust me anymore," she says with a weary sigh. "And why should they? I looked like crap for years." She laughs wryly, remembering when, in the early '90s, "I didn't know what a season was. Someone had to explain it to me. When grunge first hit, I only knew who John Galliano was because he made bias-cut dresses."

Love's first fashion moment was an entirely unexpected one. In 1992, she and husband Kurt Cobain were anointed grunge fashion icons even though they were shopping at Urban Outfitters. "We had a lot of money, but we could get only $500 out a day and we had no credit. I remember opening up The New York Times, and there's Kurt, and he's the entire style page. And then about two months later, opening up the Times, I'm the entire style page. And we didn't understand what was happening to us."

Fashion moment number two: Versace, 1997, right after Love had won praise for her role as Althea Leasure in The People vs. Larry Flynt. "The Versaces really started courting me," she recalls of her appearance in a Versace campaign and, famously, on the red carpet at the Oscars in a blinding white evening gown. She was also scheduled to model at a Versace show in Rome, which was subsequently canceled due to Gianni Versace's death. "I would have been walking down the Spanish Steps with Kate Moss and Naomi Campbell. I was thinking, I'm gonna be able to tell my daughter when she grows up that at one point in my life, I was so fabulous, I wore a see-through mauve caftan down the Spanish Steps."

Fashion moment number three: the shredded Dior couture dress from John Galliano's infamous "homeless" collection that she wore to the Golden Globes in 2000. "[Stylist] Arianne Phillips talked me into wearing that," she recalls. "I remember one day when Meryl Streep was next door at Carrie Fisher's house. I sent it to her in an Armani bag and said, 'Meryl, this is too conservative for me.'"

Love is also aware that a large part of the reason designer clothes are currently arriving at her door is that she can now fit into them. "I've lost a lot of weight, and I have done it through being quite disciplined," she says. A few times a year, Love visits a clinic called We Care for "colonics and fasting. Some people think it's about weight loss, but it's about detoxing." On Love's new menu: two Isopure shakes a day, "then I have fish and macrobiotic food. By the way, I hate reading magazines where the actresses are saying, 'Broccoli and fish, broccoli and fish.' You liars. You bulimic liars.

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"My 'rock' weight," she explains, as only a rock star can, "has always been around 150 pounds." She blames her weight gain of last year on a few factors: being "out sick," a bad breakup, but also, amusingly, eating too much macrobiotic food. "My daughter and I were kind of going for it because the dessert's fantastic," she says with a chuckle. "I put on 30 pounds, and I put on another 15 out of emotional depression. Then I finally get an Italian Vogue cover, and I'm 182 pounds." These days, she's around 139. "I looked at last year's best-dressed lists," she notes. "I didn't have a chance of getting best dressed at size 8."

Love credits friends Trudie Styler and Gwyneth Paltrow for, among many other supportive girlfriendy things, reminding her of the hard realities of the glamour business. "They were like, 'Duh, you have to walk around advertising what it is they're going to get.'" She takes another sip of her shake. "But I'm not going to become this shrill virago who's been on a diet for 12 years and hates life. I love food."

We've just been under the stairs, in a hidden closet filled with some wacky pieces — think Stevie Nicks crossed with a burlesque dancer — that Love drolly describes as having designed when "I was not well." It's a world of tulle in there, one that threatens to go up in polyester-fueled flames as she rifles through them, cigarette ash waving about. "Oh, man, these are crazy bad," she says, laughing hysterically.

Love freely uses fashion as a sign of when she has faltered. Fragile after Cobain's suicide in 1994, she agreed to be interviewed by Barbara Walters. She took herself to Nordstrom in Seattle and "bought a Mugler. A silver Thierry Mugler. I thought it was the hottest thing I'd ever owned in my life. I pulled my hair up into what I thought was a chignon, and I just had eyeliner on, basically. Did you ever see Matt Lauer and Britney Spears? Well, I was more Grand Guignol than that. More horror show."

She is also frank about her in-court wardrobe, when she was fighting drug charges and for custody of Frances Bean in 2005. "Court was mostly wardrobe by Anthropologie. Nothing wrong with Anthropologie, but I had the worst hair extensions in, and that was before I had dealt with the fact I had gone a little too crazy on the lips," she says of her then-enhanced pout. She gives big props to Marc Jacobs, however, for sticking by her. "Marc has always, always had my back. Last fall, he sent me his entire collection. The problem was that I could never wear that because it would alienate people. You've seen what happens when someone looks too good for court."

A lot of people are sticking by Love this time. "You know, Michael Stipe has this whole theory that I kept stuff in for 10 years and it all just rose to the surface. I cracked. And I cracked in public, and so I lost all of my credibility," she says reflectively. "For many years, I took pills. I felt like I had this dirty secret. Other people can have glasses of wine and things like that because they're normal people who can do things like that. But if you're allergic to that stuff, you just are, and you can't."

So she won't. Instead, she's going to release the album (early reports are that it's her best yet) and tour, and then it's back to the big screen. "I have to advertise. Then, when I'm about 50, I'm going to start directing. I can do it because of my rock-star job. You can command so much, and you can lead so many people, whether it's 200 or 200,000." Love would like to get married again, too. She remembers meeting John Galliano, whom she idolized, in Paris a couple of years after Cobain's death. "I said, 'When I get remarried, will you make my dress?' and he swore that he would."

Despite her yearning for something as conventional as a wedding gown, Love will always symbolize something very different. "Courtney is perfect for what Chanel was in the beginning," says Karl Lagerfeld. "The young Chanel was a rebel."

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