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The formula paid off immediately. In the company's first year, Gold says, it turned a profit on $1.5 million in sales, and the ink has been black ever since. Gold and Williams celebrated by acquiring an En-glish bulldog they named Lulu, who has become the company's advertising mascot. In 1998 Gold sold out to the Rowe Cos., owners of Rowe Furniture, which makes upholstered and leather furniture, and two retail chains, Home Elements and Storehouse. The deal afforded Gold financial security, and the ongoing relationship is strictly hands off.
The real wonder of the Mitchell Gold Co. is that its reach has consistently exceeded its limits. For all the ubiquity of those brown leather club chairs, they were an initial disaster. Gold and Williams picked up a pair of 1930s vintage chairs at a flea market outside Paris in 1994. But they were too small for 1990s American legs. When they approached leather wholesalers with their order, Gold and Williams found that American companies were not prepared for them: they could buy white leather or teal leather, but not basic brown. What's more, the key to the chairs was their age, their power to evoke the cigar-laden atmosphere of a bygone era, so the leather had to look old. After a long search, Gold found a factory in the Netherlands with a process for distressing leather to make it look artificially aged. He bought up its entire year's output, $100,000 worth, and turned the exclusive rights over to Pottery Barn.
Gold's alliance with Pottery Barn was just the first in a string of special relationships with retailers that has given him unmatched access to middle-class American households and has impressed industry watchers. "It's quite unusual to have captured them to the extent that he has," says Donna Warner, veteran editor of urban-style bible Metropolitan Home. These relationships come partly from connections Gold made during his stint as a buyer: when Pottery Barn decided to start carrying furniture, a friend there made sure its buyers knew about Gold and vice versa. He has also consistently backed the right horses, judging from the start which stores could take him where he wanted to go. "We smelled early on that these were going to be the hot retailers of the next decade," says Gold.
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."