We show by simple model calculations that dipole-induced dipole and interchain interactions lead to aparallelalignment of molecules with strong longitudinal dipoles for intermolecular separations below a certain value. On the other hand an antiparallel alignment is favoured for larger separations because of dipole-dipole interactions. We incorporate this change in the intermolecular configuration, which naturally leads to two ‘lengths’ in the problem, in developing a simple McMillan type molecular theory of the double reentrance phenomenon in which the following phase sequence is observed on cooling the sample: isotropic-nematic-smectic Ad-reentrant nematic-smectic A1. The calculated properties including the phase diagram are in broad agreement with experimental trends.