I have an itty bitty little entry foyer (6'x5')that was added to my house ages ago when a breezeway between the garage and house was filled in with a master bedroom suite.

It has many, many features I dislike (far too many for such a small space), but I am stuck on what to do with it. The flooring is some cheap old tile that I actually saw in a Firestone bathroom. (A classy choice for the entryway, right?)

There is also a space that used to be a closet that someone added lower cabinets to and then turned the top into a display area with glass shelves. We turned it back into a closet, since we are short on closet space, but had to hang curtains to hide it, as it would require custom doors. I'm wondering if I should just rip out the whole thing and make a little 'mud room'. DH is worried that it is too small (currently 5'x3')to hang coats & such on the walls and still have space to turn around. It would appear that there is actually more space available than the closet actually uses, as the room is actually 6' wide. You can see in the pics that there is some space to the left that I think we could use.

Here are some pics:

What do you think?

Should I bust the whole thing out, extend new flooring into the closet space, push the walls out as far as they will go, and have a little walk-in closet? I'd like to put a bench there but that is probably pushing it for space.

I could also leave it there, get some kind of doors for the upper area, and just refloor the existing foyer area.

Any suggestions would be appreciated. This is the first thing you see walking into my house and it is just hideous.