Gold's New Rush

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One secret of Gold's success has been an exceptional knack for supply-chain management. Every shipment passes under the watchful eye of a full-time statistician, a "master planner" who constantly surveys retailers and wholesalers, anticipating their demands so the factory can be ready with the necessary personnel and raw materials. In 2001 mad-cow disease had most manufacturers scrambling to fill orders for leather furniture, but not Gold: when the epidemic first made headlines, he bought up $5 million worth of South American hides, enough to keep the club chairs rolling for the next eight months. Result: 97% of the company's orders arrive on time. Gold limits his business to a selection of high-volume accounts on which he can lavish personal attention. About five years ago, he deliberately reduced his slate of buyers from 72 to 48; in the subsequent year, his business increased almost 50%, and since then his work force has more than doubled. "Joe Schmoe's company can knock off our style," he boasts, "but they can't reproduce our service."

The ultimate key to the firm's success may be the mutual respect between Gold and the rural community that has become his entrepreneurial base. Tiny Taylorsville, 1 1/2 hours north of Charlotte, has more than 60 churches, most of them Baptist, but from the beginning Gold and Williams defied local convention by being openly gay. "When I came out," Gold says, "I decided I just didn't care anymore. When we moved down South, we just bought a house and moved right in, didn't even think about it."

They did think about their role as employers. Along with a gourmet chef and a free gym, Gold gave his workers Lulu's Child Enrichment Center, a $500,000 day-care facility that is run on a strictly break-even basis. "When you drive up to the factory, the first things you see are toys and kids running around," Gold says with pride. "You know something special is going on." The message is getting through: Gold says a local minister sent him a letter congratulating him on his commitment to family values. These values are paying off: employee turnover is less than 2%, which means exceptional productivity. BDO Seidman rates productivity at Gold's factory at $168,000 per employee, compared with an industry average of $105,000.

Until now Gold has been content to direct American taste from behind the scenes. But this month, when the first Mitchell Gold retail outlet opens at ABC Carpet & Home, Gold will be selling straight to consumers, with no safety net and nobody else's name on the label. "We're going to really push the boundaries of his work," says Evan Cole, president of ABC. "He's going to do some avant-garde stuff. He'll really be able to use his creativity." Also for the first time, he will be risking channel conflict with his closest allies, the retailers that made his fortune (that's one reason Gold has steered clear of the Web).

As for that downturn in the furniture industry? In addition to the carnage among the retail outlets, Rowe, Mitchell Gold's parent company, plans to consolidate its two retail chains later this year. How does it all affect Gold? "It doesn't," he says curtly. "The people we sell to have not contracted. The people we sell to are the exciting, profitable retailers who are expanding!"

Gold even sees an upside from last year's terror attacks in the U.S., at least from the retail perspective. "Post-Sept. 11, people have really had this much deeper, warmer feeling for family and friends," he muses. "That translates in subtle ways into how people furnish their homes: people will stay home more." Another positive bellwether: furniture sales have not kept up with construction of private homes, which suggests pent-up demand waiting to be released. Williams and Gold are tight-lipped about how the company will respond to the new national mood in its furniture, but think guest-friendly items like sectional sofas.

Throughout all this, Gold's only false move may have been not taking out his brand earlier. Plagiarism is epidemic in the furniture industry, and there are few designers who haven't borrowed, if not stolen, from his work. But, as is not the case with Chanel perfume or Rolex watches, few people care whether their slipcovered sofa is an authentic Mitchell Gold or a knockoff, and that could hurt him. Nonetheless, there's no arguing with his influence: he is everywhere. Walk into any hipster apartment from New York City to Nashville, Tenn., and you will see his work, or at least his influence. "I do think about not letting stuff get too pedestrian," Gold says. "I was in London a few months ago, and I saw all this furniture being unloaded into a flat, and I said, 'That's my Kathleen sofa! That's my Pottery Barn chair! This is really too much!'" Never one to miss an opportunity, Gold walked right in and introduced himself to the owner. "The first thing she asked me was 'Where's Lulu?'"