As a new fashion season wrinkled with uncertainty gets under way, longtime boutique owner Joan Shepp is hoping her latest move will inject fabulousness into a wilting Walnut Street.

Early this month, Shepp opened a 700-square-foot Y-3 Shop-in-Shop - on the second floor of her specialty store. Y-3 is the edgy women's and menswear line that marries Japanese designer Yohji Yamamoto's structured tailoring with Adidas' trademark three stripes and fabric technology.

To fashionistas, a Y-3 store in Philadelphia means big things. Think Melrose Place, South Beach - even SoHo.

"It brings a new energy to the area that we haven't seen in a while," said Shepp as she walked through the new space. "And we will finally be able to sell men's clothing."

There are seven stand-alone Y-3 stores in the United States - including two in New York - but Joan Shepp's Shop-in-Shop is the first of its kind in the country, said Liad Krispin, director of global communications for the Adidas Fashion Group. (There are one in Paris; one in Manchester, England, and two in South Korea.)

The entire top floor of the boutique - which until recently housed shoes - had to be retrofitted with eco-friendly lighting along the ceilings and in the display cases, electric orange Y-3 signage and sleek leather ottomans. Eventually, there will be three big-screen televisions that will broadcast a continuous loop of Y-3 runway shows.

At first glance, the sporty clothing seems too different from the contemporary European designers like Dries Van Noten, Rick Owens and even Yohji Yamamoto that Joan and her daughter, Ellen, are known for carrying (and wearing). The puffy ski jackets and cotton piquette polo shirts with the vibrancy of Lacoste feel more Macy's than upscale boutique.

But upon closer look, the special fashion details of the first floor also are part of the design on the more casual second: A hooded poncho - in gray and black - that can double as a dress can easily be paired with black leggings. (The familiar Adidas stripes crawl up the back of the legs and there is a stirrup. Cool, eh?) This year's Y-3 collection boasts '80s details with the 1950s collegiate look, so there are men's sweaters with elbow patches.

My fave: A reversible, chunky hat/scarf combo has amazing style appeal even as the mercury climbs above 90 degrees.

And then there are the coveted sneakers. Y-3 sneakers are collectors' items for sneaker heads, and this year's shiny patent high-tops in cobalt blue, blacks and grays will be no different.

Danuta Mieloch, owner of Rescue Rittenhouse Spa Lounge, comes in to check out the new space a few days before it opens. She twirls in front of the mirror in a fitted ski jacket.

"I can't believe I'm trying on this jacket, and it's so hot outside," Mieloch says. "But I really like it."

The pieces are moderately priced: $150 to $250 for the sneakers; $125 for a sweatshirt dress and $300 to $500 for outerwear.

After the Walnut Street corridor's gloomy season of store closings - Ann Taylor Loft, Waterworks, Brasserie Perrier and Susanna Foo - Joan Shepp's Y-3 is an example of how the area's luxury retailers have had to reinvent themselves to stay alive, said Laurence Steinberg, principal of the Michael Salove Co., a real estate firm that specializes in retail.

Boutiques will be offering more pieces that are functional and unique, but don't scream expensive - a subtle shift in the role of the specialty store, which until the recession, focused more on offering celebrity style (like aviator sunglasses and Juicy Couture sweat suits) than what was truly exceptional.

"This concept adds a dimension of younger, cooler merchandise to Joan Shepp that she never had before," Steinberg said. "It adds to the renewed interest in Walnut Street that's changing from gloomy to optimistic. She's adjusted."

In addition to Shepp's Y-3 shop, Corie Moskow, spokeswoman for the Rittenhouse Row merchants, said that more fashion is on the way.

The grand opening for the Esprit store is scheduled for Aug. 19. Local designer Sarah Van Aken, known for her custom-made shirts, will open a new store at 17th and Sansom (the former home of Echo Chic), and Dana Bank is moving Town Home from 19th and Sansom to a location even closer to Rittenhouse Square.

In the meantime, retailers like Shepp are continuing to redefine who they are in a world that has become unforgiving to super-high price points and the same old ideas. Y-3 just might just be part of the solution.

Contact fashion writer Elizabeth Wellington at 215- 854-2704 or ewellington@phillynews.com.