October 2008. Marc Jacobs is in a photo studio in downtown New York, stripped down to a tiny pair of American Apparel underpants while his naked legs are silk-screened with the words LOUIS VUITTON in fuchsia paint. He's trying to decide if a cigarette would make him feel less self-conscious, in spite of the fact that he's wearing a nicotine patch — and in spite of his new fabulously healthy and trim physique, decorated with and celebrated by loads of tattoos, including one of Elizabeth Taylor's visage on his back.

SEE LOOKBOOK: MARC JACOBS GETS NAKED FOR LOUIS VUITTON

The lettering is poppy and familiar. It's the graffiti done by Stephen Sprouse as part of the duo's collaboration for the French house eight years ago. This time the graffiti is blindingly bright: neon pink.

Stephen Sprouse died in 2004 at the too-young age of 50. "It's an homage," Jacobs says of the new collection, which features clothing, bags, and other accessories. It's a limited release, timed to coincide with the opening of a Sprouse retrospective at Deitch Projects this month in New York and the publication of Rizzoli's The Stephen Sprouse Book. "Stephen was one of the first people to deliberately eliminate the boundaries between fashion, art, music, and design," says gallerist Jeffrey Deitch. It was Deitch who approached Jacobs and Vuitton with the idea for the collection. "And product," he says, "is a great way to get a message across."

The story of Marc Jacobs, Stephen Sprouse, and Louis Vuitton began in the late '90s, when Jacobs found himself thinking about Marcel Duchamp, the French artist who once sullied an image of the Mona Lisa with a funny little beard and mustache and called it L.H.O.O.Q., which, if you say the letters fast in French, roughly translates to "she has a hot ass."

"It's about taking something that's very iconic and revered and defacing it and creating something new, somewhat rebellious, and kind of punk," Jacobs explains. "Cut from Marcel Duchamp to me going to see Charlotte Gainsbourg's apartment," he continues. "She had, by the side of her bed, a Louis Vuitton trunk that had been painted black by her father, and the Monogram was sort of peeking through."

Suddenly it was very clear what Jacobs needed to do. He needed to deface the revered and iconic Monogram canvas, and he needed to do it in a way that was modern enough to attract a new customer to the big old French brand. To do this, he reasoned, he needed Stephen Sprouse.

Sprouse was one of the first high-fashion designers in the '80s to make clothes that were painstakingly constructed, as well as hip and young and cool. A mantle, perhaps, inherited by Jacobs himself? "God, I can't say that," Jacobs says, still clearly in awe of his late friend. "I mean, you could say that, but I never could."

The parallels are difficult to ignore: "He had this desire to take what he saw in the streets and elevate it," Jacobs says of Sprouse. "He was using all this stuff that was so costly, really beautiful materials, and he was doing it all so beautifully. There are so many people who try to affect a street style, but it doesn't have the integrity. Stephen's work was so stylistic, and it had street cred. You can't calculate that. You have it or you don't, and Stephen did."

It took some time for Jacobs to convince the Vuitton powers that be that scrawling all over their time-tested bags was a good idea, but Vuitton did, eventually, come around, and Sprouse came to Paris. The rest, of course, is It-bag history. "They thought the bags would be for the show," Jacobs says, "or for editorial." But as names on wait lists piled up, the bags were produced. And Jacobs was a genius.

Vuitton did reach a new customer — $300 million worth of them, Jacobs has said — and has continued to do so through similar partnerships with artists like Takashi Murakami and Richard Prince. Each of these bags has been a triumph. They have been shown — and sold! — in fine-art museums.

Jacobs doesn't live in a vacuum: He knows that these luxurious, spirited bags will hit the market at a touchy economic time for conspicuous consumption. But he shakes it off. "Retail therapy," he says, offering his leg up to the silk-screen artist. "It seems to work. It's not the longest-lasting therapy in the world, but it does its job. I'm not pretending to cure the nation's economy, but we do what we do, and if people enjoy it, even better."