(FORTUNE Small Business) – Group 3 Design--a firm that is hired to refurbish destitute apparel brands--recently expanded into the home-decor business. Gleason says the deal has boosted revenues at the company by 40% this year over 2003's $7 million.

UNDERSIZED Gleason has designed clothing for 18 years and spent the past decade overhauling well-known brands such as Starter, Bugle Boy, and Shaquille O'Neal's TWIsM label. But growth was limited because she felt it was unethical to work on a brand that competed with one she'd already revitalized.

BRINGING IT HOME So when Pillowtex filed for bankruptcy last July and was purchased by a group of investors, Gleason leaped at the opportunity to diversify: "I decided that we weren't going to be just an apparel-based company anymore," says Gleason, who was hired by the new owners to redevelop two of Pillowtex's towel lines in January--Cannon and Royal Velvet. Group 3's launch into the home market means more product options and selling to a larger number of higher-end retailers such as department and specialty stores. "People are nesting more," says Gleason, who plans to add at least two brands a year to her roster. --MAGGIE OVERFELT