Sacramento Business Journal

Article: The Sacramento Business Journal, Remodels create a lucrative niche for small interior design firms

Published: Friday, September 23, 2011

Kerrie Kelly opened an interior design studio on J Street during the recession. Business has boomed ever since.

Jennifer FaGalde, an independent designer in Folsom, says 2010 was her best year in the last nine, which included the peak of the real estate market.

Few people are buying homes in the sluggish economy, but there’s plenty of interest in fixing up what they now have, creating a booming market for small interior design shops.

“People work very hard and want to come home to a space they love to recharge their batteries for Monday morning,” Kelly said.

Projects range from gutting the place to dabbling with draperies — and provide a lucrative niche for small businesses offering lots of personal attention. Local connections a plus

Kelly, 38, went for flair at an early age. Her parents’ home on American River Drive was beige. Her room was electric blue.

“I didn’t care about dolls, but I did about wallpaper,” she quipped.

A graduate of Cal Poly San Luis Obispo, Kelly worked in visual merchandising at Nordstrom and Macy’s. She moved on to Ralph Lauren to become the primary representative for its home collection in Northern California — and launch her own home-based design firm.

Kelly worked as design studio manager and director of merchandising at Del Webb’s Sun City Lincoln Hills, earned a master’s in business administration and became a certified interior designer. She left Del Webb in 2003 to focus on her design firm full time.

Being a local helped, and Kelly kept up her connections and put them to business use in a wide network of referrals.

She often works with a former Del Webb colleague who now is a landscaping contractor, for example.

“She’s been more gracious about sending leads to me than vice versa, but she does the lovely stuff inside while I work on the outside,” said Matt Lemos, owner of Lemos Landscaping.

Also key for Kelly is figuring out what a client wants.

“Clients used to open Architectural Digest and say, ‘I want my house to look like this,’ ” she said. “Now I walk in and ask, ‘What do you have we can work with?”

A dining room hutch doesn’t have to be in the dining room, she said. “It can be in the den, with books.”

Diverse marketing is important. Kelly turned a weekly column in the Sacramento Bee into chapters for a book that would become “Home Decor.” She’s appeared on TV and launched a reclaimed wood product line.

Jack and Susan MacMillan chose the Kerrie Kelly Design Lab for an extensive home renovation project because one of Jack’s colleagues at University of California Davis is married to Kristen Gong, one of four designers in the group.

“It’s nice to have a little relationship when you go into something like this,” MacMillan said.

The couple has lived in Gold River for years and doesn’t see moving in the next decade. They never liked the kitchen/dining area — and are spending $100,000 to gut it, take out walls to open the room and put in new flooring.

But small touch-ups also can change everything, FaGalde said. A new face on a gaudy gold fireplace altered the feeling of an entire room.

“Every job is so individual,” she said. Clients may keep the furniture but change the window coverings. Others gut the place and start over.

“Now, it’s reassess, change it up a little,” she said. “I work just getting to know clients, where they grew up, what they loved — or hated. One client hated blue because every time he stepped into his mother’s formal dining room — which was blue — he got spanked.”

Networking at professional organizations has helped FaGalde keep current with trends and build referrals. And instead of trying to do it all, she outsources jobs like computer-assisted plan drawings for bathroom remodels.

Mary Ann Downey is a 32-year veteran of the residential and commercial interior design business in Sacramento.

She struggled when the bottom fell out of the real estate market, but picked up slack doing rental properties. She does dental offices, too.

Some people who put off redoing the living room or other household project are doing it now. Their homes may have lost value, but the neighborhood is stable and they have decided to stay put.

Repeat business is important, in part because she works hard to avoid change orders once a project has started.

Like the others, she believes listening is important.

“Clients say they just want to do one thing, but when I get there, they really want to do a lot of things,” Downey said.

Interior design: What sells in a small shop

• Personal service
• Listening to what the client wants
• Networking to keep up with trends and garner referrals
• Diverse marketing