(FORTUNE Small Business) - Forget the smell of freshly baked bread. When the Johnston family, which has operated a retail bakery in the same Sheboygan, Wis., location for over 50 years, wanted to do something to lure more walk-in customers, the idea was to think big.

"We needed a face for our business, something that better represents us," says John Johnston, 42, who took over the business side of Johnston's Bakery from his mother in 1986. (He has an MBA from the University of Wisconsin at Oshkosh; his brothers - Joe, 50, and Michael, 53 - are veteran bakers.)

Before

After

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For the past 15 years the family has successfully competed with giant grocery chains by concentrating on its wholesale business: selling frozen dough to Midwest retailers and hard rolls to food distributors and local venues such as golf courses. But a few years ago the Johnstons decided to try to boost retail sales by remodeling the store - inside and out. "My business professor told me I was crazy, that retail bakeries were extinct," says John Johnston.

The family debated how to remodel for several years. In late summer 2004 the local paper ran a photo from 1892 of an old Sheboygan bakery - the same building that today houses Johnston's. "We didn't even know that picture existed," says Johnston, whose parents bought the building in 1957. (Johnston's was founded in a different location in 1950.) Newly inspired, the brothers scoured the Internet, searching for a mix of antique and modern fixtures that would evoke the feel of a turn-of-the-century shop and draw new customers.

They invested about $400,000 in the redesign, which included wooden floors reconstructed from old barns, tin ceilings inspired by Sheboygan's old taverns, and belt-driven fans, manufactured by a small company in Zionsville, Ind., named Fanimation. Antique Singer sewing-machine treadles form the bases of the tables.

Hoping to boost the bakery's retail business, the Johnstons expanded into the driveway next door, upgrading the floor plan from a few scattered chairs to a genuine coffee shop with seating for 34. The renovations consumed the first six months of 2005, but when the Johnstons unveiled the finished product, they saw an immediate jump in walk-in customers - with no changes to the product lineup. Johnston says that retail sales increased by 40% right away, and foot traffic is still increasing, boosting overall revenue to about $20 million.

Says local resident (and recent convert) Nichola Suprick, 38: "I drive past the bakery every day, but never went in before because it wasn't that appealing. They paid attention to the quality of every last detail. It has that old-world ambiance about it."

Johnston's thoughts exactly.

Exterior

The family matriarch, Caroline Johnston, tweaked the building's facade throughout the '70s, with brick archways to evoke the wood-burning ovens of Italy. But the Johnston brothers felt the design was dated, and the stucco and faux bricks weren't aging well. A local architect used an image from 1892 to recreate the building's original facade. The brothers even researched books from that period to find the typeface for their new sign.

Interior

Johnston wanted to replace the aged linoleum with stone tile, but the building's sloping floor would have caused the stones to crack. He chose wood restored from old barns instead - not perfect but period-correct. The belt-driven fans, manufactured by a small company in Indiana, "look Willy Wonka-ish," he says. Everything inside, from the wainscot wood trim to the hand-painted menu signs, uses burgundy as a base color - Johnston's favorite.