Homefest owner Michael Di Paulo responds to the cautious consumer who is “spending less money more often” by increasing his stores' merchandise mix in price ranges that work well and offer the most “look” for the money.

Homefest, their main store, showcases better home accents and furniture in a sophisticated urban format, a mix of about 65% accessories, 15% furniture and 20% tabletop in 6,500 square feet of space. Then there's Boxwood & Begonia, which carries basically the same categories as Homefest but in a style described by Michael Di Paulo as “a little more polished, European country, in a more garden conservatory type of presentation.” Matelasse, the third store, is where customers shop for better bed, bath and body featuring European linens, towels, home fragrance and decorative accessories.

Each store concept is considered a separate department of one merchandising master plan, and it's a plan that hums along so smoothly that the Di Paulos literally run things from an office located about an hour north of Denver, close to their home in Fort Collins. “We live in the country with horses and go down to Denver about once a week,” Di Paulo said. “The point-of-sale system actually allows me to communicate with all of the stores in real time, see the inventory, what they're selling, as they're doing it.”

And despite the shaky economic climate, business is already ahead of last year. “I anticipated some kind of effect and keep thinking the other shoe is going to drop, but it hasn't yet,” he said.

Homefest, Boxwood & Begonia, and Matelasse cater to the tastes of an affluent, sophisticated, well-traveled clientele. Boxwood & Begonia grew from a staff designer's talent for floral arranging into a European Country presentation of accessories in a separate storefront. Matelasse carries fine linens, bed and bath decor and home fragrance.

He has several opinions as to why that's happening and is reluctant to provide a concrete answer, but says it's probably “an aggressive approach to keeping new merchandise in the store and our name in front of our customers in a year that the 'smart money' might have told us to do the opposite.

“I met (industry consultant) Randy Eller at an ART Conference a couple of years ago where I had been a presenter. He asked me then what I thought was the reason for our success during a tough retail period. I think it's because we buy to do business. A lot of retailers' mentality is to cut back and not put as much merchandise in the store; our approach is to make sure we have fresh merchandise during that period. Our business held then, and we're having the same experience right now. We get new merchandise in every week.”

Michael takes care of the advertising, visual merchandising and design, while Lindy manages the numbers. It's the same working relationship the couple had in their prior life as designers and manufacturers of women's apparel in Southern California. “After 20 years in the fashion industry we decided a change was in order and moved our family to Colorado in 1993,” Di Paulo said.

Homefest showcases an inventory that is 65% accessories, 15% furniture and 20% tabletop in 6,500 square feet of space. The combined square footage of the three stores is 13,000.

“We have such a terrific demographic in Greenwood Village. Our customers are young — about 30 to 50 — affluent, well-traveled and have a pretty good sense of what they like and what's happening,” Di Paulo said. “Our stores are lifestyle merchandised to capitalize on their sophisticated tastes. We try to stay forward and current with what they see in their travels.”

After a few years in the retail center (Homefest is the center's largest store), Di Paulo began to look for ways to offer his customer base more ideas for other areas of the home. “In 2002, taking categories that were selling well in Homefest but lacked enough space to be properly presented, we opened three additional concepts in the same retail center.”

One of those concepts took root as a result of a designer on staff who also designed and placed permanent botanicals. “It was a terrific profit center so we spun it off into Boxwood & Begonia, with permanent florals, upscale country furniture, antiques, decorative accessories, wall art, rugs and tabletop.” In addition to Boxwood & Begonia and Matelasse, the Di Paulos also opened youth and nursery furnishings shop I Bambini! which they sold in 2007.

Print advertising is placed in 5280, the mile-high city's glossy city magazine. “It's very tastefully done and helps us reach people outside our trading area. We think we're missing some a little further out that don't know we're here. We're also advertising to coincide with the launch of our new Web site.”

Which brings us to the latest and greatest development at Homefest: A powerful new Web site with e-commerce capabilities scheduled to go live by the time this article publishes. “We'll also use it to contact customers in our trading area with e-mail blasts announcing special in-store events that are only for our e-commerce customers,” Di Paulo added.

And do the former women's apparel designers ever think about applying their creative juices to the home accents categories from the vendor side? “We've considered manufacturing our own items — we just don't know what category or when.”

In the meantime, they can enjoy the satisfaction — and the profits — that come from knowing their customers, their employees, their product and their business.