Article: NEW OWNER ILYSE WILPON, ALONG WITH A SMALL BUT LOYAL TEAM, HOPES TO TURN BLUE DRAGON, A ONCE AILING PAJAMA AND SLIPPER COMPANY, INTO A SERIOUS FASHION PLAYER.

In January 2002, Ilyse Wilpon walked into Blue Dragon's shabby office on New York's Third Avenue. The carpet was stained, the paint was peeling and the 300-sq.-ft. space was crammed with Mandarin silk pajamas and slipper-like shoes. It was the shoes that caught Wilpon's attention.

"They had immensely attractive, intricate work, and I said, `This is the business. Get rid of the clothing,' " Wilpon said. She had been looking to buy a distressed company in 2002, when her friend, Richard Ortoli, told her about the financial problems he was having with Blue Dragon, a small apparel and accessories company he had started in 2000.

One month after Wilpon stepped ...

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