Gold Standard

Sometimes, the company can cut around defects in the big rolls of fabric that it receives from mills, but 15% of the time, it has to return the entire roll. With leather, which takes on coloring as unevenly as human skin takes on a suntan, the odds are even worse. "Getting good, high-quality fabric is just the beginning of the production process, but it's probably the biggest reason why customers experience delays," Gold says.

One way that he and Williams have tried to overcome this challenge is by offering fewer fabrics. Sometimes, they argue, the right choice for customers is less choice. Because the company offers only a couple of hundred fabrics, it can keep them all in stock. And Gold and Williams hope that the mills will get better at producing the fabrics, since the company is ordering them in higher volumes.

While producing the right fabrics has been the biggest hurdle for Gold and Williams, planning the actual manufacturing of their products has been another challenge. "In the past, when we planned on growing 40% and grew 70%, we sometimes didn't have enough people to do the upholstering," Gold says. "So instead of a promised 4-week delivery time, we might end up going to 6 weeks, or sometimes even 12 to 14 weeks when it's really gotten bad."

Those days are over for the most part, thanks in part to the statistician they hired away from a fiber-optics plant down the road to work as a production planner. Gold and Williams have also insulated themselves from bad planning by forcing all of the retailers they work with to always keep every Mitchell Gold product that they show on their sales floor in inventory. That way, if customers see something that they like in a store and want an exact replica, they can have it that week.

Gold and Williams make the medicine go down easier for retailers by offering a program called Fast Furniture. Through this initiative, retailers have access to two styles of sofas, with a choice of four or five fabrics each -- above and beyond what they actually show in their stores. The Mitchell Gold Co. keeps those items in a warehouse in North Carolina and is ready to ship them within five days of a customer request.

Of course, inventory initiatives wouldn't add up to much if customers didn't like what they were seeing on the sales floor and were instead putting in special orders. In fact, 80% of customers who buy the company's products want pieces that are identical to what they see in the stores. "We've aligned ourselves with retailers that have a good sense of what people will like when they walk in the door," says a clearly relieved Gold. Only 3% of buyers insist on using fabric that they've picked out elsewhere -- something that the company allows but clearly doesn't enjoy. The other 17% pick from Mitchell Gold's selection of fabrics.

Retail Rules

When 80% of the Mitchell Gold Co.'s customers order furniture that is deliverable within one week, it's much easier to make them happy. But achieving that percentage depends on partnering with the right retailers -- those that know what kind of furniture customers will want and which fabrics and colors they'll want it in.

After struggling for a couple of years to get their merchandise into department stores, big-box retailers like J.C. Penney, and large furniture showrooms run by retailers like Levitz, Gold and Williams threw up their hands in frustration. "When you're working with big, established retailers, it's hard just to get your foot in the door," says Williams. "There's not much incentive for them to change."

So Gold and Williams said good riddance. "We didn't have the stomach for it anyway," says Gold, who spent most of his twenties working as a buyer for Bloomingdale's. "Department stores aren't in a growth mode for upholstered furniture, their displays are terrible, they don't pay on time, and their salespeople are a mess." He says that the Mitchell Gold Co.'s selling strategy crystallized for him one day in the mid-1990s when he and Williams were looking at a list of the top-100 furniture retailers in the United States. "Bob basically said, 'Forget what this says. We want to be supplying the stores that are going to be on this list in 10 or 15 years.' "

It turned out to be a convenient strategy, since many of the retailers who are white-hot today were in their infancy back then and were more open to new ideas and new suppliers. When the Mitchell Gold Co. first started supplying Pottery Barn, the chain wasn't selling upholstered furniture at all. Restoration Hardware had only 5 stores when it first started carrying Mitchell Gold furniture; now it has more than 100. Crate and Barrel, which now sells furniture in 21 of its 87 stores, had only 2 stores when it started stocking Mitchell Gold products. And Storehouse, Mitchell Gold's sister company, also stocks the line in all of its 41 stores.