Some businesses think big during the downturn

The swimwear maker is betting that it can boost its market share while its competitors are cutting back -- and the hot sales of its daring Animal Instinct swimsuits seem to support the move.

Other businesses are also growing. They're far from the majority, but these contrarians -- including an engineering firm counting on the steady need for seismic safety, a fitness studio selling franchises and a store moving in where a bankrupt competitor moved out -- are betting that demand will carry them through.

By growing now, they say, they will be better positioned for the future.

"It's a bit counterintuitive doing this in a tough economy," said Alex Bhathal, who owns Raj Manufacturing with sister Lisa Vogel. "The growth and development takes us out of our comfort zone."

Animal Instinct's popular one-piece suit, a skimpy pastiche of sequins, zebra, snake and leopard prints with a revealing cutout along the sides, retails for $124 -- not a cheap item. But it has tripled sales expectations despite the economic slump.

So Raj, which manufactures swimsuits for Guess, St. John and Athena, has added international accounts, launched an in-house luxury line and built 10,000 additional square feet of warehouse space.

Retailers Forever 21 Inc. and Kohl's Corp. are also expanding. The two chains recently bid $6.25 million to move into 46 Mervyns stores left vacant by the chain's recent Chapter 11 bankruptcy and liquidation.

Walt Disney Co. isn't standing pat, announcing in October that it would spend $1 billion to make over its disappointing California Adventure park.

And pizza chain Shakey's, riding high from a rollout of renovations and an improved menu that resulted in a 9% jump in revenue in the last four years, is opening new locations for the first time in 15 years.

There is, of course, sizable risk. Even if a company's owners pay for an expansion themselves, as Raj's did, those whose sales miss projections can quickly spiral into debt with few available sources of loans to help reverse course.

"The challenge is having contingent sources of cash," said Al Osborne, senior associate dean and management professor at the UCLA Anderson School of Management.