Wedged between a Saladworks restaurant and a UPS store on Spruce Street, a storefront displays tony dresses in jewel tones, with a neon "Dry Cleaning Shirts" sign glowing nearby.

The proximity has left some passersby scratching their heads. Is it a boutique or a dry cleaner?

It's both.

Run by Yoon Sook Kim and her daughter HanNa Jung, Bonded BoutiqueCleaner in University City is a seven-month-old hybrid shop that was born of both opportunity and necessity.

Until October, this spot was just Bonded Cleaners, Kim's utilitarian dry cleaning business — more function than fashion — with several working sewing machines in an unadorned and largely empty interior. And like many dry cleaners across the country, Bonded suffered in the last two years as the economy forced customers to reduce or eliminate their dry-cleaning bills.

At the same time, Jung, a Moore College of Art & Design graduate, had been living in New York and struggling as well. She was working at a less-than-dream job at a doll manufacturer and was so dissatisfied with the dead-end position that she considered leaving it to wait tables while she started her own clothing line. Then, when she went home to visit her mother, the idea hit her.

"It was a dingy, regular old dry cleaners," said Jung. "I said, 'This place is ugly and you have to change it. If you remodel, you can draw in more people.'?"

At first her mother wasn't interested at all, said Jung. It was only after she offered to provide the investment and do all the renovations that her mother finally gave in.

Diversifying in tough economic times is not unusual for dry cleaners, but historically it comes in the form of spin-off services such as rug, upholstery, or commercial linen cleaning, according to the National Cleaners Association, an industry trade group. Taking on a retail boutique is something executive director Nora Nealis never recalls seeing.

The clothes are unique as well. In a part of town that's mostly dominated by Urban Outfitters, the Gap, Ann Taylor, and American Apparel, Jung offers a highly curated selection of women's casual wear, accessories. and jewelry rarely found west of the Schuylkill. She showcases feminine frocks, such as a strapless cocktail dress of royal blue and silver brocade, and sheer tops with unexpected details; she also offers basics such as bright-colored skinny jeans, all with an average price of about $65. An antique armoire overflows with colorful costume jewelry, priced between $20 and $60.

Though the prices are reasonable, Jung say she doesn't carry cheap things.

"It's important that I find things that are made well," said Jung. "I could find stylish, cheap clothes, but that's not the brand image I want."

Boutique customers tend to be college students and twentysomethings, but Jung says she also gets business from locals and those who work at the nearby hospitals and universities. Many of these customers started out as dry cleaning customers, or vice versa.

"While waiting for clothes, they can't help but be distracted and they go and look and then purchase something," said Jung. "Or the other way around. They come, see the window display, see a dress that they like, they come in and then they realize that, hey, you're a dry cleaner, too. Then they'll bring in their alterations and their dry cleaning."

Both the boutique and the cleaners are open from 8 a.m. to 8 p.m., Monday to Friday, and 9 a.m. to 8 p.m. Saturday.

That means longer hours for Kim, who used to close the cleaners at 6 o'clock most days, but it's been worth it: The dry cleaning business is up 50 percent, and the boutique is already making a profit.

"I'm very stressed. This work is hard work," said Kim. "Now [I think] it's a good idea because business [was] on the decline and the rent is expensive."

Jung exhausted all her resources to open the boutique. She used her personal savings to fund the renovation and purchase the shop's initial inventory. She tapped many of her friends, including a trained engineer who was handy with tools, to design and build the space. In addition to splitting the rent with her mother, she found lots of other ways to keep her start-up costs low, including using her home computer to print clothing hang tags, then throwing a party where her friends helped cut them to size.

Jung, 30, is one of a number of young, locally trained designers finding that it's possible to make a living in Philadelphia. In Old City, custom dressmaker Lele Tran recently opened USsU.S., a co-op featuring the creations of several emerging local designers. And the Philadelphia Fashion Incubator, a Project Runway-esque program recently launched by the city, Macy's, and the Center City District, sets up local design school grads with a showroom and professional guidance for one year to help them launch and keep their businesses in the city.

Kim is even feeling optimistic about paying the rent this summer — a worry she's had for the last two years — when dry cleaning business typically slows.

But Jung isn't resting on her good fortune. This summer she will finally launch her own self-titled line of women's wear, featuring feminine, easy-to-wear dresses — some of which are made of dry clean-only fabrics. She's also launching 911, her collection of little black dresses in a bag. The black minis in wrinkle-free fabrics fold up into a matching pouch and fit into a glove compartment or an oversize bag in case of a fashion emergency.

The only flaw in the setup seems to be perplexed potential customers.

"Since the renovation, people are getting confused," Jung said. "I see them with clothes, and they walk by … there are a few times, even now, I have to chase them down the street."

But Jung has a solution for that, too. She's considering moving to a newly vacant storefront up the street where the boutique and the cleaners could still share a common space — but with separate entrances.