California Closets keeps reins on growth

The proverbial rising tide in this case, the tide of construction of high-end homes lifted David Wilhoyte's business, California Closets.

But Wilhoyte,who with his wife Kim owns the Reno franchise of California Closets, isn't terribly worried that the high-end construction market might slow down.

If that happens, he says, it's likely that the company's remodeling business which these days accounts for about 40 percent of its sales will pick up the slack.

And one of the region's more nettlesome economic issues the tight supply of qualified labor has kept California Closets from expanding so quickly in Reno that Wilhoyte would fear that he was over-extended.

Rather than taking a risk with less-qualified designers and builders, the company has been asking its 11 employees to work longer hours.

In exchange, the company goes to great lengths to reduce turnover in a staff where the average tenure already is over five years.

It pays, for instance, 75 percent of employees' health benefits at a time that rising costs have forced sharp cutbacks in benefits at many small employers.

More important,Wilhoyte says, is creation of a team atmosphere.

"It's almost like we're friends with one another," he says.

Wilhoyte, himself a licensed contractor, occasionally goes on installation jobs as one of the guys.

If nothing else, he says, those visits to customers' homes give him insight into customers' views of California Closets.

Even though the privately held company has kept tight reins on its growth,Wilhoyte says sales growth this year has been "pretty substantial." "This is Reno," he says."It's been unbelievable." At the same time, the California Closets franchise has widened its product offerings far beyond the closet and garage organization systems that were its mainstay when the Wilhoytes purchased the business three years ago.

Custom-designed home offices are big these days.

So are pantry systems and wine racks.

Entertainment centers are a growing piece of the business.As guest rooms are converted into home offices, sales of fold-down Murphy beds have climbed.

Based in San Rafael, Calif., the parent company of California Closets says the average sale at one of its franchise stores is about $2,900, and sales range from about $400 to $30,000.

In northern Nevada and around Lake Tahoe, the top end sometimes runs double that.

Since the Wilhoytes purchased the business, they've used their experience in construction and design to revamp nearly every process from design through production to protect their margins and preserve the emphasis on quality that's Wilhoyte's mantra.

"People don't want the cheapest solution," he tells employees."They want the best value."

Homeowners typically move or undertake big remodeling projects every six to eight years, and each of those decisions provides an opening for California Closets.

"There is always going to be a demand for our product so long as we're able to maintain the quality,"Wilhoyte says.