ELKIN'S SECOND ACT: Elkin transforms itself from a declining textile town to a craft destination with a strong school system.

• Author: Mims, Bryan

The Reeves Theater is one of those old-school art deco movie houses, with its marquee bejeweled in lightbulbs suspended over the sidewalk. Built in 1941 with 700 seats, the Reeves brought the silver screen to the red-clay mill town of Elkin.

By the 1990s, the theater's golden age had flickered out, and it appeared the Reeves was destined for the same fate as the town's major textile mill: demise and desertion. Moviegoers had fled to the multiplexes, and the Main Street venue sat vacant for 23 years. "Everything inside was damaged or destroyed," says Debbie Carson, one of the owners giving the Reeves a revival. "The first time I walked in, I was not convinced the building was salvageable." The seats were moldy, the roof sagged, and "the air felt heavy and horrible."

Today, the theater has been restored to its former glory. With more than 250 seats, the venue hosts concerts by local and national acts and a weekly open mic night for aspiring singers. Its Old-Time Jam showcases local musicians every fourth Thursday of the month. The theater has a cafe that serves farm-to-table fare from vendors in the area; its bar brims with regional craft beer and wine. "In the summer, we have loads of fresh vegetables, tomatoes and things coming in," Carson says.

She and her husband, Chris Groner, along with partner Erik Dahlager, bought the theater in 2013 with plans to turn it into a live music destination. What had been a silent shell is up in lights once again.

Just as the Reeves Theater has found its second act, so has Elkin, a town of about 4,200 people set among the foothills along the Yadkin River. For more than a century, the economic bedrock of this town was wrapped in blankets. The Chatham Manufacturing Co., started in 1877, churned out millions of wool blankets and flannel garments, employing 3,500 people during the 1960s and '70s. It stood like a brick citadel on the hill, the words "Chatham Blankets" spelled out in lighted red letters, a comforting glow on cold winter nights.

In 1988, after more than a century of ownership, the Chatham family lost control of the plant to a Danish textile manufacturer. Within a few years, the business was insolvent. True Textiles later occupied a small area of the complex, once employing about 100 people. But Leslie Schlender, Elkin's economic development director, says the Canadian-owned company moved most jobs to the Northeast, keeping a handful of engineering, design and sales positions in Elkin. The curtain...