Dazzling dresses, just like diamonds, deserve the right settings. And in Manhattan, in the vicinity of Fifth Avenue and 59th Street, you can find these settings everywhere. Central Park. The Grand Army Plaza. The magnificent old Plaza Hotel. . . .

The area boasts perfect backdrops for a fashion shoot. And we utilized them when photographing the dresses of Peter Noviello and Sherrie Bloom, one of the hottest design teams in business today.Noviello and Bloom design under the label Chetta B. They appeared on the style scene eight years ago, and since that time their profit margin has gone up, up, up. Annual sales now are around $20 million.

Chetta B has been so successful because, to begin with, it fills a void in the fashion market. Before the label came along, a woman who wanted a smart, sophisticated dress to wear to work or to a party really had to hunt. Separates predominated in the stores, and unless you wanted to settle for something matronly or shell out a fortune for a top designer frock, you were out of luck. Which brings up another reason for Chetta B's success. It's priced within reason.

Although the clothes aren't cheap, by any means, they're not out of sight the way many high-fashion items are these days. (Around $180 will get you a daytime outfit; for $500 or so, you can purchase something for evening.)

Then, of course, the clothes are distinctive - and that's something all style-conscious women seek. Fabrics used in the clothes are created by the design team - you're not going to find them anywhere else - and the silhouettes each season are remarkably fashion-forward.

"We study the European market carefully, travel a lot and watch what all the top couturiers are doing," explains Bloom. "We especially like Mugler and Montana. Their clothes are innovative in terms of shape. But we don't copy anyone. We feel it's very important to have our own unique look - something customers can spot instantly the minute they walk into a store."

The look is at once sophisticated and sporty. Clean-cut lines predominate. Ruffles and froufrou aren't part of the picture. And, although Noviello and Bloom do beautiful things for evening, they have never done - and probably never will do - a billowing ball gown.

"We tend toward simplicity," says Bloom. "The woman who loves smart pants and jackets will like our clothes. They project a rather tailored feeling."

The smart, tailored look of Chetta B has been harmoniously achieved because Bloom and her partner are on the same wavelength.

"We could go into different rooms, Sherrie and I - rooms filled with the same fabrics - and nine times out of ten, we'd choose the identical bolt," says Noviello.

Although the designers think alike, they still bring their own individualistic qualities to the business relationship. Peter is more outgoing and very gifted at sketching. Sherrie understands contemporary women and their clothing needs, and new designs always are tried on her first to see if they're going to work on a female body.

Noviello and Bloom also come from different backgrounds.

Sherrie, an accomplished pianist, grew up in Manhattan and always was interested in fashion. She took merchandising courses at the Fashion Insitute of Technology and soon was immersed in the apparel industry.

Peter, on the other hand, originally had no interest in fashion. After moving to Manhattan from his home on Long Island, he took a job as a delivery boy in a flower shop. When the clothing store next door needed extra help on Saturdays, he worked there for extra cash. Soon he was working full time and eventually became a partner. He then began design-ing his own creations and selling them to boutiques all over Manhattan. And he began designing his own clothes as well.

The two met when they both happened to be employed by a large knitwear manufacturer. But before they collaborated professionally, Sherrie headed her own knitwear division of Teal Traina called "Sherena," and Peter worked as a designer for a variety of companies. They were ultimately drawn together when they realized the need for smart dresses and the potential such a business might have.

Along with Sherrie's brother, Howard, the two formed Chetta B (the company is named after Howard's son Chet and his daughter Bari). And they began designing feminine yet sporty clothes that immediately caught on with store buyers because they were different.

"We did cotton when everyone else was doing crepe de chine," says Noviello. "We did gabardine, and that was almost unheard of for a dress house."

Indeed, the merchandise has exhibited a very forward-thinking design philosophy from the very beginning, according to Howard Bloom, who serves as president of the company.

The firm also has concentrated on market needs from the beginning, and has opened a petite division and a collection called Noviello-Bloom, which focuses on lush leathers and suedes and has given the design duo a whole new area in which to utilize their creative talents.

The dress division, however, continues to be the mainstay of the company, and for these warm weather months it's focusing on short hem lengths and soft silhouettes. There are lots of feminine petal skirts, onion-shaped skirts and sleek pegged skirts. Linen, woven cottons, cotton knits and stretchy fabrics are in the spotlight.

Short and boxy jackets appear over strapless sundresses, while sexy, loose culottes provide a cool and comfortable alternative.

Evening glitters and glows with fishtail sequins. Navy is important, and it often is

teamed with pristine white. Bright colors also are essential. Fuchsia. Cherry red. Luscious purple. Sunny citrus yellow and bright lime green. And there are stripes and polka dots for added dash.

Looking toward fall, the picture becomes even more colorful and innovative. The newest silhouette will be the chemise with a fuller body and more tapered bottom. Skirts are soft with unpressed pleats at the hip or loosely wrapped in sarong style. And feminine and pretty pants, which are making such a splash all over Seventh Avenue for fall, are in the collection right along with the signature dresses.

"We're excited about what we're doing," says Noviello. "The clothes are in 4,000 specialty stores nationwide and almost every major department store. We have a special little area in Bergdorf's that's exclusively devoted to our label - and that's a lot of fun. Sherrie and I wouldn't change any of it. We enjoy being busy. But there are times when the business is extremely stressful. That's the hard part about being in fashion today: the stress, the competition and the continual killer pace. Kids who are going into the field should be advised of this. They've got to have talent to succeed. But they've also got to have the ability to withstand all the pressure. It's not as glamorous as it seems."

Five collections are produced by Noviello and Bloom every year. There are countless trips to mills to work with the people who manufacture the fabrics they design. And before a new line opens, they often are in their workrooms from early morning until very late at night.

To get away from it all once in a while they go for drives in the country. And Peter likes to design his own clothes, watch old-time movies and lift weights at the gym, while Sherrie plays tennis.

As for the future, the design duo may get into sunglasses.

They've noticed a void in that market and think it just might have the same potential as dresses.