Hot Seat

Not many people can create a Zen garden from the bones of an old Nash Rambler dealership, but John Gabbert is one of them.

The founder of Room & Board, a furniture company in Minneapolis, Gabbert connected the old showroom to another building via a glassed-in, atriumlike space--an ad hoc architectural assembly that transcends its mass-production roots. Sleek modern pieces, sold through Room & Board's catalog and nine U.S. stores, line the garden's perimeter. As he passes a classic Eames leather lounge chair, set near the company's own Eclipse cocktail table, Gabbert takes a moment to define his growth strategy: "We definitely believe that the turtle wins the race."

Lately, though, the turtle is looking downright rabbity. Last year, Room & Board (R&B), which is privately held, saw revenue rise by 32%, taking in, Gabbert says, $175 million. Almost defensively, he attributes the growth spurt to a real-estate snafu that led him to open stores in both New York and San Francisco within six months of each other. Contrast that with his competitor, Design Within Reach, which opened 21 new stores in 2005 and saw its stock fall 78%.

"I don't see any real advantages to being a billion-dollar company," Gabbert says, resembling, in his minimalist glasses, tweed jacket, and velvet pants, a MoMA curator more than the president of a company set to hit $200 million in sales this year. Reminded that that's a lot of money, he just chuckles. "We almost start out by asking, What is the conventional wisdom?, and then do the opposite and test that first," he says. "We're not adding any new stores in 2006. We want our employees and manufacturers to have a reasonable work life, and when you open two stores that close together--if you drive a business too hard--some don't."

Try that line at a public company's shareholder meeting.

Gabbert began his furniture apprenticeship working in the family firm (more Ethan Allen than Aalto), eventually opening R&B in 1980 as a some-assembly-required, Ikea-style operation. He eventually decided to scrap the pulpwood approach in favor of high-grade furniture he and his friends would want to buy. Always a fan of midcentury and Danish designers such as George Nelson, Hans Wegner, and Florence Knoll (the New York store in SoHo is housed in the former Knoll showroom), he drove R&B to focus on pieces with clean, uncluttered lines. R&B also teamed up with Herman Miller and others to sell reissues of archetypes by the likes of Saarinen, Mies van der Rohe, and Eames.

In the years since, not only has modern become a mass aesthetic but home decor in general has become an American obsession--an estimated $130 billion market. There's now an entire TV network, HGTV, and a growing list of new shelter magazines (Dwell, ReadyMade, and Domino) dedicated to hip domesticity. And much of the money goes to a softer, less-streamlined version of '50s and '60s style--a look R&B has made its signature. (Queer Eye for the Straight Guy and Oprah have both featured R&B's designs.) "Eight or nine years ago, we saw things evolving," Gabbert says, "but I think 'lucky' is the right word. The trend happened to be where my interest was."

There's no substitute for luck in business, of course, but it doesn't explain how R&B got this far. Beyond the highfalutin design talk, Gabbert and his crew run their business with a mix of instinct, focus, and humanity--and they're kicking the competition's teeth in. Just walking into R&B is a different experience. On a recent Sunday in New York, its sunny four-story store was awash with customers and salespeople. Tea and coffee were being served in glass mugs. Sales pitches are of the "Let me know if I can help" variety, the product of a no-commission sales structure. All prices are fixed in the once-yearly catalog (an idea Gabbert picked up from Ikea), and there are no sales--but no incentive for inflated "regular" prices, either.

"It's a cooler version of Crate & Barrel," says Jeannie Uyanik, a customer found lolling on a sofa with her husband. "The prices are worth it, and with the variety, you can build rooms and not look like it all came from the same place." She adds that R&B has "a great sense of service, and that to me is almost more important than the furniture itself."

Gabbert's aversion to groupthink is built into every part of his supply chain. "You have to make the customer experience hassle-free from point of sale to delivery," says Bruce Champeau, R&B's VP of operations. Most retail furniture makers treat delivery, for example, as the hind end of the business. R&B saw it as a soft spot. It invested in an exclusive partnership with a trucking company, so your club chair arrives in a new muted-gray rig, driven by nonfelonious "associates"; they know the products intimately and assemble them on-site as needed. And they'll deliver an unlimited number of items--as in, a truckload--for $199 coast to coast, $69 locally. (Go ahead, read that last sentence again.)