In a Lancashire town in the 1930s, a cotton mill is forced to close. One of the workers, Gracie Platt, asks the young manager, Hugh Philips, if there is any prospect of it reopening. He replies that there is none, unless a new process can be discovered which cuts costs. Gracie informs her colleagues of the bad news, but suggests that they leave in good style, singing a rousing chorus of 'Sing As We Go' as they march through the factory gates. Gracie returns to the home she shares with her aunt and uncle. Her aunt informs her that she has heard of a job available at a boarding house in Blackpool.

Meanwhile, Hugh has been told of a new type of synthetic silk being developed by Sir William Upton, and speculates that if he could convince Upton to use his mill to manufacture it the business would be saved. He learns that Sir William can be located in Blackpool.

Next morning, Gracie leaves on a bicycle to save money on train fare. At the boarding house she has to rise at 6am to serve breakfast, make beds and wash dishes. The guests prove difficult, demanding and, in one case, inappropriately familiar. Her first day as a breakfast waitress ends with her emptying a dish of rhubarb over a boarder's head and she is immediately dismissed.

At the employment exchange she is offered a job selling Krunchy Wunchy Toffee, but as it does not start for another week she decides to enter a local bathing beauty competition. Though she soon changes her mind when she sees the other attractive girls queuing to register for the competition, she does make friends with one of them; a Londoner called Phyllis Logan. Gracie asks her if she knows of any cheap lodgings in the area and Phyllis tells her that her roommate has just moved out and advises her to see her landlady, a bogus spiritualist named Madame Osiris.

Gracie moves in, and stands in for Madame Osiris when she is ill and some customers arrive for a spirit reading. One of these clients informs her that the music publishers Ritz and Fingelstein need a singer to promote one of their new songs. She turns up and is a big hit with the crowd. At this point, Hugh arrives to find Upton and, having no idea that Gracie is even in Blackpool, is fascinated to see her performing. He meets Phyllis; they realise they have a mutual friend in Gracie and become friends themselves.

Hugh and Phyllis visit Blackpool Pleasure Beach together, and Hugh tells her of his deepening feelings. Visiting a sideshow, they discover that Gracie is working as a 'human spider' (her head poking through a board on which a spider's body has been painted) and 'the vanishing girl' (which entails her disappearing through a hollow chair while obscured by a white sheet.) Later that day, Gracie accidentally bumps into Sir William Upton. She tells him how his revolutionary new artificial silk would transform the fortunes of the mill.

Despite Hugh's jealous objections, Phyllis enters the bathing beauty competition as Miss London. Gracie is present (vending Krunchy Wunchy). Hugh tells Gracie that he has met Sir William, and also that he has been arguing with Phyllis, whose lack of seriousness is causing friction between them. Phyllis wins the competition.

At a celebratory party that evening at the Tower Ballroom, Phyllis gets drunk and leaves early with a party of male admirers. Gracie tracks them down to a circus, but causes chaos during a synchronised swimming act and again, back at the ballroom, when she accidentally appears on stage in place of Phyllis and only wins over the hostile audience with another song. Phyllis returns to the boarding house with a male admirer; Gracie manages to eject him from the house just as Hugh arrives.

The deal with Upton is secured, the mill is to re-open, and Hugh rewards Gracie by making her Welfare Officer. She leads the workers in a final rendition of 'Sing As We Go' as they all march back through the mill gates.