When the global economic crisis began last year on Wall Street, many of the businesses hit the earliest and hardest were only blocks away.

Just ask Samanta Cortes, 38, owner and founder of a small embroidery company in New York City’s legendary but shrinking Garment District. In the year following the downturn, her firm, Fashion Design Concepts, has been hanging by a thread as orders plummeted and, at times, bankruptcy loomed.

FDC embroiders high-end sample prototypes for designers. Most of her clients are industry heavywieghts like Oscar de la Renta and Ralph Lauren, but FDC also creates prototypes for smaller designers and budget brands.

In November 2008, Cortes recalls, orders halted when it became clear that the country was entering a severe protracted recession. According to Cortes, many of the designers that used FDC for early-stage prototypes either turned to cheaper Asian outlets or simply stopped ordering all together.

"It has been a nightmare," Cortes said. "Business fell off a cliff."

Cortes is no stranger to financial downturns. She built FDC in the wake of the economic slump of 2001. At first, orders boomed -- she hired 12 full-time employees and traded FDC's small office for a larger one-room manufacturing space.

Jim Meciano, 46, an industry veteran and FDC’s embroidery designer or digitizer, said that the latest slowdown in business happened suddenly. "We went from around 10 orders a month, with orders piled on my desk to about two to three orders a month very quickly," he said.

To manage the decline in orders, Cortes began trimming costs. The largest expense, employee salaries, was the most significant cutback. She slashed her staff from 12 full-time employees to only five.

"This was something I had never done before,” Cortes said. “I had never cut my staff."

For the remaining employees, she reduced the workweek from five days to four. As FDC eked by, important computer upgrades and the maintenance of needed appliances were put on the back burner. Cortes also began renting out the back of her office space to a subcontrator to help defray expenses. The biggest blow came when she stopped drawing a salary for herself and relied on savings and credit cards to cover personal expenses.

In the past, clients sought out FDC to complete orders, but now Cortes says she spends a lot of her time hitting the street as her own saleswoman. Rather than focusing on production, Cortes seeks out potential clients, trying to sell them on her business.

"It's a lot of hard work to recover out of this," Cortes said. "The economy right now, yeah it's picking up but you're such bear bones."

Cortes' story is very familiar to many businesses in the Garment District. The district, which has experienced a steady decline since the 1970s, had problems that began well before the recession. Many of the area's businesses are struggling with rising rents. When Cortes set up FDC in 2001, for example, her rent was $1,500. In 2007 the price of her small manufacturing space skyrocketed 35 percent to $7,000.

As a whole, the district's woes stem largely from the industry's shift to Asia for cheaper manufacturing. According to a recent survey done by the Council of Fashion Designers of America, only two out of the nine million square feet in the district are still used to manufacture clothing. Many manufactures, like Cortes, are fearful that a district that once produced 95 percent of the clothing worn by Americans (in the 1960s) could vanish.

It's been a year since the financial downturn caused the fashion industry to run for cover. And after about six months of losses, things are beginning to pick up at FDC. The embroidery company has been in the black for two months and recently took on four part-time employees to meet the demands of a big order. But despite the upswing, Cortes is quick to put her own success in context. The recession took such a huge chunk out of her financially and she is still seriously considering selling or filing for bankruptcy.

What's more, the emotional toll has affected her life outside of the office. Her relationship with her boyfriend suffered because she couldn't help but “bring work home.”

If Cortes left the industry she worries that her departure would accelerate the drain of technical expertise essential for the district’s preservation.

"It's a shame if I don't stay on board,” she said. "When I leave the industry or if I go bankrupt there won't be as many people there to do what I do."