Anderson Paint employee Vid Marvin labels a custom can of paint in the Ann Arbor-based shop on West Stadium.

Melanie Maxwell | AnnArbor.com

Ann Arbor-based Anderson Paint Co. will expand its product lines and customer base March 1 when neighboring O’Leary Paint closes its doors on West Stadium.

The O’Leary store closing ends that store’s 30-year run in Ann Arbor as a competitor.

But it also opens opportunities for each store to gain revenue through a unique partnership: Both O’Leary’s custom-manufactured products and the store’s manager will move one block south to Anderson, keeping the line of paint in the Ann Arbor market.

It’s neither a merger nor a business sale, owners of each business said.

“We’re not buying any of their stock,” said Bob Anderson Jr., co-owner of the independent Ann Arbor paint company. And O’Leary is not assuming an ownership role in Anderson Paint.

Instead, Anderson said, “We’re going to be taking the full line of their products in (to Anderson stores).”

The Lansing-based O’Leary manufactures its own products, which is rare among independently owned paint companies, Anderson said.

Closing the Ann Arbor store will allow the company to maintain sales of its products in Washtenaw County without the expense of operating a retail outlet.

At the same time, the deal allows Anderson to grow its business by servicing existing O’Leary customers from its store on West Stadium, located about a block from the O’Leary store. Anderson’s other store, located on Washtenaw in Pittsfield Township, also will carry O’Leary products.

The proximity of the O’Leary and Anderson paint stores on West Stadium set up the companies as friendly competitors over the years, Anderson said.

Anderson Paint, 2386 W. Stadium.

Melanie Maxwell | AnnArbor.com

“It’s because of the relationship we had with them that we were able to sit down and come up with this win-win type of arrangement,” Anderson said.

Many O’Leary customers come from the commercial sector, Anderson said. That’s also a strong area for Anderson Paint, he added, as big-box retailers continue to pressure independent stores.

“They’re a significant competitor right now,” Anderson said. “From a retail standpoint, they are really doing a great job marketing and advertising to a segment of the population that buys from a big box — and it is growing every year.”

But Anderson also is fighting that trend — along with other independents across the U.S. — with hands-on service, a range of products and competitive price points, its co-owner said.

“We’re doing our best to get that (retail) business from them,” Anderson said.

Bringing on the O’Leary product lines means Anderson Paint will be the only store in Washtenaw County to carry them, Anderson said. To make room, a few lines will be cut in the store, including a line of California Paint exterior products.

Anderson has hired local O’Leary store manager Steve Keith to its 20-employee roster, and the closing store’s other two employees have been offered positions at other O’Leary outlets.

David O’Leary, co-owner of that chain, said he’s “excited about what this could mean for our companies and the market.”

As he prepares to close his Ann Arbor store, O'Leary and his brother, John, are planning to list the West Stadium building for sale or lease. They’re hiring Jim Chaconas of Colliers International to broker a deal.

Once the Ann Arbor store closes, O'Leary will have nine retail locations, eight of which are in Michigan, with one in Elkhart, Ind.

Meanwhile, Anderson said store sales have been mired in a five-year period of sluggishness as the economy stalled and the home-building industry contracted.

Anderson said he and his brother and co-owner, Tony Anderson, look forward to both the immediate sales boost and the foundation it sets for the store as economic recovery takes hold over a longer term.

This was a creative outcome for his store and O’Leary, he emphasized.

“We’ve got over 60 years doing business in this market,” he said. “You can’t just build something like that overnight … You’ve got to do things right and change and adapt.”

Paula Gardner is Business News Director of AnnArbor.com. Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.