April 10, 2023

Sometimes life and business have a way of coming full circle.

For Denise Cotter and Michelle Marino, that means a path back into a retail industry that brought them together and that they swore they’d left behind for good.

“We said, we want to start this business, but we’re never doing retail again,” Marino said. “We’re having a design business. We’re never doing retail again. But we want the name of our business to exude a destination, a place you can go to. Just in case.”

That proved the right move – as have many this design firm has made since it was founded in 2005.

With a newly renovated new headquarters, which includes a retail store, Houndstooth House has a big vision for its future and a big honor to go with it.

Cotter and Marino recently were named 2023 South Dakota Small Business Persons of the Year by the South Dakota office of the U.S. Small Business Administration.

“I can’t say enough good about those two ladies as far as their focus, their design, their energy level, their relationship-centered work style,” said Paula Brown, their lender and a senior vice president at CorTrust Bank. “They just do a wonderful job at what they’re doing.”

Cotter and Marino ironically grew up 90 minutes away from each other in Kansas and each worked at The Buckle before moving to Sioux Falls.

For Cotter, it was about taking a promotion – she was the second store manager for The Empire Mall location that under her leadership became one of the top stores in the company.

Marino came to Sioux Falls with her husband’s job transfer in law enforcement and ended up working for her former employer, which introduced her to Cotter.

They worked together at The Buckle for five or six years before each leaving to begin their families, then reconnected as Marino had started faux painting for homeowners in Sioux Falls.

“You get in, people like you, they respect what you have to offer, and they let you do things in their house,” she said. “I went to Denise and was like, ‘Are you ready to go back to work?’ And she’s like, ‘I think I am.’”

They started Houndstooth House out of two minivans with only a logo on the side for marketing.

“Some weeks we worked seven hours a week, and some weeks we worked 27,” Marino said. “It depended on what needed to happen with our families.”

While they didn’t have specific backgrounds in interior design, they leveraged their business skills and retail experience.

“Textiles on your body is the same as textiles in your home,” Marino said.

A few calls from friends led to referrals, and “we knew we hit it big when we had three clients on Spencer Avenue, and they just kept calling us,” Marino said.

The tipping point for the business took the form of Washington Square, the downtown mixed-use building that began construction about a decade ago and included 21 condos. Houndstooth House was asked by the developer to be the preferred designer for the homes and ultimately spent four years helping design 17 of the condos.

“Blood, sweat and tears,” Cotter describes it. “You knew it was going to be big. They said, ‘Can you do it?’ We said, ‘Absolutely,’ but inside we didn’t know what it would entail.”

They managed the condo designs while still running their broader business.

“It was great timing, and the business environment in Sioux Falls was growing and expanding, and Sioux Falls was becoming a destination, and we got to grow our business at the same pace,” Cotter said.

Their Washington Square clients have become friends and – in at least one case – repeat clients.

“We just started the remodeling process for one of them,” Marino said. “And a second one just came in and said, ‘I think it’s about time.’”

Retail evolution

The work on Washington Square helped guide Houndstooth House into a small retail store.

“We needed to have products on hand so that when units were complete we could come in with an accessory van and place everything,” Cotter said. “So we started ordering accessories and that built our confidence to order furniture.”

After accumulating much of it in their basements, they decided to make a move.

The first store at 201 W. 37th St. was less than 2,000 square feet. It opened just as the pandemic was beginning, but it still took off.

“The reason it worked so well wasn’t because of the location,” Marino said. “It was us having the products on hand that we could take to people’s houses. We’d get in a house and say, ‘You need two lamps.’”

The building purchase introduced them to Brown at CorTrust Bank.

“What I enjoy is they wanted the relationship with a local bank,” Brown said. “We’re a small community bank, we focus on our local roots being in Sioux Falls, and we’re relationship-oriented like they are, and I think it was just a match for all of us.”

She connected them with Dakota Business Finance, knowing they could take advantage of its SBA 504 loan program.

“I love their story,” said Lynne Keller Forbes, executive director of Dakota Business Finance.

“Their first building was really, really tiny, but it was their first retail space. I often refer to them as the dynamic duo. When you see them together, that’s kind of what they are – very uplifting, very positive, just a really neat startup business.”

When the adjacent building at 101 W. 37th St. became available, they knew they had to stretch to make it work.

“This was a big dream,” Cotter said. “We were securing the financing while we were looking for tenants (in the original building), and we went through five to seven options that never transpired.”

Ultimately, the building was leased by event venue Casetta, allowing the Houndstooth owners to retain that real estate while renovating their new space.

“We are not independently wealthy people nor are we from a trust fund or had an investor,” Cotter said. “When we did Washington Square, instead of just splitting the proceeds and going on vacation, we bought a building with what we could because we wanted to make an investment. We didn’t want to work that hard for five years and not have anything to show for it.”

Now, their new space is a 10,000-square-foot, completely renovated retail store and design studio, and includes space leased to a dental office.

“It was just this ugly medical building and nobody paid attention to it, and then they did some wonderful things,” Keller Forbes said.

The new space allows Houndstooth House to significantly expand its retail merchandise, including sofas, bedroom sets and dining furniture.

There’s also a selection of gift items, and some product lines have led to others. Selling charcuterie boards and stemware led to a wine license and selling mustards, dips and sauces, for instance.

“Everything is going boutique, and we tried really hard to have this feel like an experience,” Cotter said, adding the store also sells to others in the building and design industry.

An annual art show has succeeded in bringing in new customers and helping connect them with original local pieces for their homes, the business partners said.

“The neighborhood has been overwhelmingly thankful,” Cotter added. “The whole first month they said, ‘Thank you for giving life to this building.’”

Forbes nominated them for Small Business Persons of the Year after looking through the many loans her organization had done for small businesses.

“They just rose to the top of that this year,” she said. “From where they started in a van carting around samples in between carting their kids around, to where they have come with a beautiful retail space and becoming landlords, it’s just a really good story.”

It’s also likely not over.

Houndstooth House will go to Washington, D.C., later this month to be recognized with other statewide winners at the national awards.

And the owners’ long-range plan for their property includes even more growth.

“We started as independent interior designers, moved into store owners, now we’re landlords, and we’re going to go out as developers because we will develop this corner,” Cotter said.

“I think it only makes sense that it’s a multiple-use building.”

A miniature Washington Square, if you will, she said.

And a full-circle symbol that the smallest of businesses can go on to achieve big things.

Hours for the Houndstooth House retail store at 9 a.m. to 6 p.m. Monday through Thursday, 9 a.m. to 5 p.m. Friday and 11 a.m. to 4 p.m. Saturday.