Small Business Success Stories: Artistic Finishes Inc.

Small Business Success Stories: Artistic Finishes Inc.

A residential hardwood-flooring maker bounces back from the recession by going lean.

You could say that Roseville-based Artistic Finishes Inc. has worked its way to the bottom of the hardwood flooring accessories market. That’s because co-founder and president Dennis Leach was able to get in on the ground floor of a booming industry.

Artistic Finishes designs and produces pre-finished hardwood flooring accessories including moldings, vents, stair treads and risers. It was founded in 1985 by Leach and his brother Tom after their residential painting business began to slow down. Seeing that homebuilders were increasingly using pre-finished cabinetry, the brothers rented spray booths and hired a couple of people who knew how to pre-finish wood millwork. Five years later, Dennis Leach picked up contracts to make floor molding for some of the top flooring manufacturers in the U.S. and Canada.

“At that time, companies like that manufactured the floors, but brought in the moldings and accessory parts,” Leach says. “Then they packaged them together and sold them to distributors.” After seven years or so, a buying group including some of the flooring world’s largest chains—Carpet One, Flooring America and Pro Source Flooring, among them—asked Artistic to create an online catalog program for their roughly 2,000 combined stores.

In 2007, Artistic launched MoldingsOnline, which gives its retail customers direct access to moldings available in thousands of hardwood floor finishes. This turned out to be exactly what the market was looking for: MoldingsOnline’s annual revenue is almost equal to those of Artistic Finishes’ original business.

Then came the recession. Home sales plummeted, and Artistic’s revenues plummeted from $20 million to $10 million in two years. The company was forced to cut half its workforce. “My message [to the remaining employees] was to hang in there,” Leach says. “We continued to sharpen our tools and planned for the economy to turn.” The company adopted lean manufacturing and continuous improvement programs. “We knew that once we were back on sound footing, we would grow and be even stronger,” Leach says.

Revenue is now up to about $16 million, and Artistic has maintained 27 consecutive years of profitability. (Tom Leach retired early in 2016.) “They had to figure out how to restructure, and I wasn’t surprised that they were able to,” says Joseph Bauer, vice president of Edina-based Fidelity Bank, which has had Artistic as a client since 2000. “Denny has a good pulse for where the industry is going and what contractors want.”

Due to retailer demand, Artistic Finishes and MoldingsOnline now offer shipping from their facilities directly to its customers’ customers. Leach also has kept his operations lean and nimble to respond to changes in consumer preferences. “We want to be able to present what we can do very quickly without being weighed down by a lot of inventory,” he says. “Our aim is to produce only the products our customers want, when they want it.”

Mike Hannon, managing principal of Golden Valley-based Lingate Financial Group Inc., is a member of Artistic’s board and has known Leach for 30 years. He cites Leach’s forthrightness as a key part of the loyalty he engenders. “He runs the company with open books—and we haven’t always agreed on that,” Hannon says. “He shows up ready to work hard every day, and his people respond to that.”

Those people have built Dennis Leach’s company—and they’ve stepped up.

Building Loyalty

Like many companies, Artistic Finishes Inc. was hit hard during the recent recession, cutting almost half its workforce. But unlike many companies, Artistic Finishes found that when times were better, many of its workers hadn’t moved on to other careers, and were in fact eager to return.

“We had to cut people who had been with us from the beginning,” says Cassie Alverson, the company’s director of sales and marketing. “They were not only OK with that, but later they wanted to come back. That’s a testament to the leadership that [co-founder] Denny Leach shows.

“Even now, we have workers who are officially retired but still get some hours because they love what they do.”

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