WHEN Morris met Ada in London's East End in the late 1800s, they had no idea they were about to launch a fashion empire that is now a world leader in its field.

Morada, the company they created, started selling fashion accessories to the London garment industry.

Today, the company is one of the largest suppliers of lining fabrics to manufacturers throughout Europe and the Far East.

And with the launch of its new retail division, Morada Interiors, its name looks set to become a feature on High Streets throughout the UK.

Yet just over five years ago, Morada was looking at the prospect of following much of Britain's textile industry into oblivion.

As a small cog of the giant Carrington Coates Viyella group, it was based in an old mill in Ramsbottom and losing money. When the business was sold as part of the management buy-out of the yarns and fabrics division, it fared no better.

The man who transformed the business is Stuart Taylor who was recruited in 1996 to run Morada as a separate operation. After 12 months, the factory was no longer losing money and had achieved break-even. His bosses at International Performance Textiles, however, had a surprise in store.

"They suddenly decided they wanted to sell the business," Stuart recalled. "Given the state of the industry at the time, I had a simple choice -- either buy it myself or take a hike and look for another job."

Stuart led the management buy-out team which clinched the deal in October 1998 and then looked at the options for growth.

"We knew we could never survive on linings alone," he said. "It is a high volume business involving a massive amount of detail and incredible logistics."

The first move into new markets was a contract with the Ministry of Defence to supply curtains to its bases worldwide. The deal was the start of the Home Furnishings division which now provides a wide range of fabrics and textile products to schools, hospitals, hotels and retail giants like Marks and Spencer.

The diversification, however, could not disguise the fundamental problems of the out-dated factory which Stuart described as "dying on its feet."

The decision was taken to close the Ramsbottom mill and build a custom-designed £1.5 million base at Blackburn.

"We pulled out of manufacturing and changed into a distribution and marketing company," explained Stuart. "We have now built a global infrastructure to support customers wherever they choose to design and produce."

Morada's main warehouse at Shadsworth holds four million metres of fabric, supported by subsidiary operations in Germany, Finland, Ireland, Turkey, Estonia, Holland and Morocco. The company has invested heavily in technology and has its own purpose-designed laboratory which is fully accredited by retail chains such as Marks and Spencer, Next and Arcadia.

The company was also the first lining supplier to offer an on-line trading facility which allows customers to check stock, prices, place and track orders whatever the time, day or night. Given the nature of Morada's traditional business, it is little known outside the textile trade. All that is about to change with the launch of Morada Interiors.

The first Morada retail outlet opened in Southport in June last year, followed by concessions in Sleepmasters stores in Warrington and Wigan.

Offering everything from furniture to furnishings and from curtains to scented candles, Morada says it can transform every room in the house with products sourced from around the world.

"We are aiming for the Laura Ashley middle market," explained Stuart. "We offer customers a free interior design service to help with the home make-over."

The concept has been refined over the past 12 months and Morada is ready to roll out a store opening programme. A flagship store will open in Altrincham in June and the company is hoping to open between five and ten new shops every year for the next five years.

Linings still account for more than half of the company's £11 million turnover, but Stuart is hoping the new Interiors business will challenge for the dominant role within the operation.