Homefest finds a niche ... and decorates it.

• Author: TAYLOR, HELEN
• Position: Brief Article

Had Mike Di Paulo and his wife, Lindy, opened their Fort Collins-based Homefest shop two or three years earlier, they might have a different story to tell. The couple moved to town in 1993 with plans to open some sort of retail outfit. They settled on the idea of a fine home-accessories and gift shop, and opened a 3,000-square-foot store in Fort Collins' Old Town.

It was a bit of a risk, said Mike Di Paulo, who cut his teeth in the garment manufacturing business. "We knew we were at the front of a trend, and had we come in a few years earlier, it would have been too soon. But Fort Collins was a growing, business-friendly town, and we thought people were ready for something a little higher-end and a bit more sophisticated."

How right they were.

Four years later, flushed with the success of their first store, the couple opened a second Homefest in Denver. Optimally situated between the well-heeled communities of Greenwood Village and Cherry Hills, the store flourished. Revenue growth at the Denver store has exceeded 30% a year, Di Paulo said, and between March '99 and March 2000, sales jumped 58%.

These returns fit nicely with the Di Paulos' long-held expansion plans. Within the next few months, they expect to open a third location in Newport Beach, Calif., that will spearhead a rapid expansion into several toney Southern California communities.

Homefest's inventory changes constantly to accommodate fickle customers. Products range from distressed-wood furniture that looks fresh from the farmhouse to animal and botanical prints reminiscent of some Hemingway-esque safari.

"Our niche is very trend-related," Di Paulo said. "We have...