Mix and match: brothers Derek and Greg Banton, South African emigres, have turned a feel for fashion into a thriving business capitalizing on others' rejected clothes. (Small Business).

CALL this a rags-to-riches story in the true sense of rags.

Derek and Greg Banton, South African brothers who arrived in this country more than a decade ago, have taken a detour from their recycled clothing business, called Born Again Clothing Inc., by creating a women's and children's label made from new and recycled clothing.

Their Riley clothing label, a division of the company's used clothing business and stocked by the likes of Fred Segal, Neiman Marcus, Nordstrom and Bloomingdale's, is a mix of new fabrics accented with strips of fabric culled from millions of used clothing items.

The Riley label also is made up of old blue jeans, T-shirts and blouses that are given a new look with collars and sleeves snipped from vintage tablecloths, cashmere sweaters, crocheted tops or vintage silk scarves.

The label was launched three years ago and now makes up more than 70 percent of the Vernon-based company's revenues.

"The line is just phenomenal," said Shelley Yun, owner of Shaya, an upscale boutique with locations in the Beverly Center and Century City Shopping Center. "I have pages and pages of customers waiting for their new stuff."

And at prices that would hardly suggest used merchandise. A pair of cropped sweatpants with a used denim waist band, pockets and decorative star sell for $83. A Chicago Cubs T-shirt decorated with peasant sleeves made from an embroidered Mexican housedress goes for $59.

Of course it hasn't hurt that Halle Berry, Jennifer Aniston, Britney Spears and Daryl Hannah have been seen wearing the line -- named after Derek's 3-year-old daughter Riley.

The clothing, designed by Jeanine Mark, has been so successful that the company plans to use the proceeds to launch a line of casual footwear later this year. "The Riley label has overtaken the vintage clothing side of our business by far," said Derek, inside his office decorated with mounted heads of an eland and a rooi hartebeest the 45-year-old entrepreneur shot in Africa. One wall is covered with colorful patches retrieved from vintage garments.

While the Riley label dominates their business, the Bantons continue to sell used clothing and vintage goods out of their Vernon warehouse, where the rumble of passing trucks rattles the walls and bales of clothing are stacked to the ceiling.

To further expand their market, they started a Web site last October (vintagetrens.com) that resells the best of what they find on the Internet.

Getting into fashion was not the first thing on Derek's mind when he arrived in this country in 1987 from Johannesburg, South Africa. Derek was to be a distributor for a car alarm company.

He started dabbling in the clothing business, importing a few items like belt buckles from South Africa, and soon launched a line of women's leather wear under the label Ethnix.

At the time, a friend in Dallas started a used clothing business, buying up leftovers from places like the Salvation Army and Goodwill, and then reselling them to retailers.

Derek decided to try the used clothing business too, first spending $6,000 to purchase 12 bales of used clothing. When the bales arrived in Los Angeles, Derek's sister Janice got creative with her sewing machine -- cutting up pieces of leather left over from Derek's leather wear business.

Sewing patches of leather and suede looked good, she gave the blue jeans a new lease on life. The Bantons set out to sell their new creations at flea markets in Redondo Beach and Pasadena.

Eventually, Derek and his brother began a full-fledged used clothing business, called Born Again (no religious reference intended, Born Again refers to the recycled clothing).

Move to downtown

They started out small, operating out of their Benedict Canyon home until they could no longer sew garments in their living room. So they rented a small warehouse on the edge of the downtown L.A. garment district at 7th and Mateo streets.

Two weeks after moving in, someone broke in and stole half their merchandise. The following night, the thieves returned to steal the other half.

Derek and Greg moved out of their house and into the warehouse where they lived for 4 1/2 years, sleeping on mattresses and showering at their mother's house in the San Fernando Valley.

In 1997, the Bantons were able to buy their own warehouse in Vernon with the help of two Small Business Association loans. But just as they moved in, the Japanese market, one of the strongest in the used blue jean market, fell precipitously. So they wound up renting one half of their warehouse to another clothing company.

With the Japanese market declining, the Bantons turned their strategy toward fashion, creating garments that were trendy but came from used clothing.

The Riley label is all the rage now, but Derek said that like any apparel venture, their line will change with fashion trends. "We'll do cutting edge fashion no matter what types of fabrics are used," he said.

RELATED ARTICLE: PROFILE

Born Again Clothing Inc.

Year Founded: 1993

Core Business: Vintage and contemporary fashion

Revenues in 2001: $4.7 million

Revenues in 2002: $10 million

Employees in 2001: 18

Employees in 2002: 39

Goal: Grow into a clothing empire.

Driving Force: Consumers looking for trendy fashions that are slightly different.