By Arlyn Tobias Gajilan; Chuck Williams

(FORTUNE Small Business) – If not for Chuck Williams, your salads would be bereft of that splash of balsamic vinegar, your pasta might lack that oomph given by a shot of garlic from a garlic press, and holiday cookies might take until February to get to the oven without a timesaving KitchenAid standing mixer. A founding father of the American "foodie" movement, Williams sold the country on those and many other condiments and kitchen tools, which he first stocked at Williams-Sonoma, the gourmet specialty shop he created from a defunct hardware store in 1956. Since then, his little shop and catalog have morphed into a retailing and mail-order giant that's moved beyond the kitchen and now includes Pottery Barn, Hold Everything, Chambers, and West Elm, a new contemporary home-furnishings catalog. Last year the company posted $2.3 billion in revenue and opened its 478th store. Here's how Williams transformed a rural Northern California hardware store into a gourmet haven, permanently altering the American kitchen and the national palate. --ARLYN TOBIAS GAJILAN

"My first memories of being in the kitchen were with my grandmother, who had a restaurant in Lima, Ohio, when she was younger. When she'd make divinity fudge or a lemon meringue pie, she would have me beat the egg whites for her. This was before electric mixers, so I had to use a big oval platter and a fork. It took forever, but I didn't mind. Being in the kitchen with her made me happy.

Happiness was in short supply during the Depression. My father's auto-repair business went to pot and finally closed. Not finding work, he decided that we should move to California. Being a teenager, I found a job picking fruit for pennies. My father still couldn't find work and felt he was a burden on us, and he finally just left me, my mother, and my sister to fend for ourselves. I saw him only once after that. Consequently I grew up pretty fast. My mother decided that we should move to the desert--near Palm Springs--where I got a job on a date ranch.

Those weren't easy times, but I did begin to experience the things that influenced me years later when I opened Williams-Sonoma. I moved in with the family who owned the date ranch and began working in their roadside shop, both helping customers and packing dates and grapefruit, after my sister, Marie, suddenly died at age 19 and my mother moved back to Florida. I became expert at dealing with discriminating customers, which were mostly what we had back then. People who could afford to be tourists during the Depression had money, and they were very clear on how they spent it.

Knowing how to treat customers and having a few carpentry skills helped me land other retail jobs. I worked at Bullock's department store in Los Angeles, where I was in the window-dressing department. From there I got a job at I. Magnin in Hollywood. This was during the golden age of personal shopping when women expected to be waited on hand and foot. Many wouldn't even come into the store; they'd call a favorite salesperson to send them dresses, shoes, hats, and gloves on approval.

Before World War II, I tried to enlist in the Air Force, but examining doctors said I had a thyroid condition and wouldn't sign me up. Anxious to do something for the war effort, I worked on the assembly lines for Lockheed Aircraft and later volunteered to be part of its traveling maintenance crew. We were stationed in East Africa and India. I was pretty busy, but I managed to develop a taste for investigating the countryside in my free time. I visited small towns and villages to sample the local foods, coffees, and some of the strongest homemade alcohol I've ever had.

After the war I returned to Los Angeles. I hooked up with one of my overseas buddies and visited Sonoma to play golf, and I just fell in love with the place. I soon moved there, bought a small piece of property, and built a house for myself. I immediately got my contractor's license, and by 1953, I had built or renovated quite a few houses for other people and was living pretty comfortably in Sonoma as a contractor.

I got the idea for Williams-Sonoma in 1953 after two friends and I decided to splurge and take a trip to Europe. Knowing how to cook and being interested in eating, I was fascinated with Paris. I spent about two weeks there, sampling small restaurants and seeing all the wonderful cooking equipment that was available to the French home cook. There were so many things we didn't have in this country, such as heavy sauté pans, huge stockpots, fish poachers, and an endless array of bakeware. There was no difference between what home cooks and restaurants used. But in this country, what home cooks could buy were relatively inexpensive pots and pans, made out of thin aluminum or tin.

I began thinking that Sonoma was a good place to start a business selling what I'd found in France. Sonoma was just a country town back then, but lots of people from San Francisco had summer homes there. And a small group of us were fans of French cooking and had a kind of regular rotating dinner party. So I bought a building downtown with a hardware store. My intention was to transform the place into a series of shops, including one of my own.

The first Williams-Sonoma opened just before Christmas 1956. As with my house construction, I remodeled everything myself. I covered the floor in a checkerboard of black and white tile and painted the walls a brilliant shade of yellow I'd seen in pictures of Russian houses. Back then most people bought pots and pans in department and hardware stores, which usually piled them on tables in heaps. I didn't do that. Not many people in this country had seen some of the things we were selling, so I thought you should see each pan in the best possible way. I put them up on a shelf in size order, with all the handles facing the same way, ensuring that anyone walking in would see the display at its best angle. If somebody wanted to buy something, he had to ask me to get it for him, thus creating conversation. As in the upscale stores I had worked in, I tried to build the place so that it demanded that customers be served. That approach made us interact and let me talk up French cooking.

Almost as soon as I opened, friends and customers pressed me to move the shop to San Francisco. In early 1958, I listened. Several told me location would be key, and I found a storefront just off Union Square on an upscale shopping block. That location didn't come cheap. I signed what was then a rather expensive ten-year lease, at $400 a month or 10% of gross sales, whichever was bigger. That first year the shop grossed $35,000. Sales increased yearly, so my landlord realized a pretty nice bargain.

I may not have understood real estate contracts, but I knew how to take advantage of the rising interest in fine food. By 1961 a few cookbooks that were a step above the Fannie Farmer variety started showing up. Among them was Julia Child's Mastering the Art of French Cooking, which was followed by her TV show the next year. She really encouraged people to cook, and as her show began to find an audience, we found more customers. One night she showed how to make a soufflé, and the next day people came in asking about soufflé dishes. Around this time, James Beard, now renowned as the dean of American cooking, came in, and we became good friends. He and other notable food writers of the day helped spread the word.

Other customers helped too. Jackie Mallorca, a copywriter for a local advertising agency and a store regular, suggested that a mail-order catalog would help build business beyond the Bay Area. I don't like taking gambles, so I sat on it for a while. I was lucky enough to ask the advice of Edward Marcus, who was also a customer and happened to run the Neiman Marcus catalog. He thought the timing made sense, and Jackie and I created the first catalog in 1971.

When I say catalog, I'm being a bit generous. That first one was simple--black and white--and fit into business-sized envelopes. Our mailing list had only about 5,000 names, but we printed 10,000 copies so we had extra to give away in the shop. Local purchases were sent free via UPS. Since credit cards hadn't yet appeared, we opened charge accounts for almost anyone. If you needed to return something, you could send it back without hassle. That kind of customer service kept people shopping.

To keep the store and catalog stocked with new items, I took trips to France every January. Garlic presses, lemon zesters, ice-cream makers, and food processors are the kinds of things people take for granted now. But before they found a place in American kitchens, Williams-Sonoma sold them. Not everyone was convinced they'd sell widely, not even the manufacturers. The KitchenAid stand mixer, for example, could be bought only at restaurant-supply stores or through Avon-like parties. I approached the manufacturer, Hobart, and soon had them to sell. It was expensive compared with other mixers, but it became a must-have and a top seller for both us and Hobart.

Right from the beginning I filled the store with what I wanted to see in my kitchen, and always attracted customers that liked what I like. That was true for both cooking equipment and food. I was in Milan visiting one of my favorite stores and saw a pretty, frosted hexagonal bottle filled with something that looked like hair tonic to me. Not being able to read Italian, I was unsure of what it was, but I bought it anyway. The store's owner later explained that it was a condiment that farmers traditionally made for themselves or sold at roadside stands. The tradition was dying out as farmers' kids began moving to the city. What I'd bought and later distributed through Williams-Sonoma turned out to be balsamic vinegar. That was a great success story for us.

Those kinds of discoveries earned us a bit of a cult following. By 1972 the store was doing pretty well, the mail-order business kept growing, and I was having trouble keeping up. For 17 years we'd stayed a one-store business. Like lots of entrepreneurs, I did everything myself, from sweeping the sidewalk to balancing the books. But when it came to the business end of things, I was smart enough to know I didn't know enough to expand.

I turned to Edward Marcus again. He advised incorporating, and he and a couple of his friends bought about 50% of the company. Eddie contributed advice while I continued to search for new and different things. In 1973 we opened a second store, in Beverly Hills on Rodeo Drive. That was followed up with stores in Palo Alto and Costa Mesa. Meanwhile, the catalog had been redesigned, and the mail-order business had grown so much by 1977 that we had to open a small distribution center. Things seemed as if they were going pretty well.

Finally Eddie realized we needed an overall manager and hired a friend of his. A few months later Eddie died. It was a personal blow but also a financial one. Through a couple of unfortunate decisions by the new management, the company was quickly in debt. The company had about $4 million in sales, but we posted a net loss of $173,000. I'm not a financier, but I knew we were in trouble and I'd have to sell. By that point, I just wanted the easiest way out. My lawyer found a buyer--Howard Lester, who used to work at IBM. He bought the company on the condition that I stay on to select the merchandise and run the catalog. Lester's the one who got things turned around.

I know you're supposed to feel happy when the company you founded goes public, but I wasn't when we went public in 1983. It's not your company anymore. You can be part of it, but it's not yours. Still, the company really grew after that. Slowly Lester expanded the business by buying the Gardener's Eden catalog, then later the Pottery Barn stores. By 1986, Williams-Sonoma had its first $100 million year. I stayed focused on merchandise but also began writing and editing cookbooks. In 1991 the first books of the Williams-Sonoma Kitchen Library Series were published. Since then, I've written several more cookbooks and edited over 150. In the past decade over 17 million Williams-Sonoma books have been sold.

I don't think of us as a huge company, though, but as one store. That's my approach when I select merchandise, which I still do. One of my more recent finds was the Dualit toaster (I'm holding one on page 33). I spotted it at a classic design shop in Paris and just thought it was beautiful and something that would look good even 100 years from now. The least expensive model sells for $199, but it's been a phenomenon. We sold more than 25,000 last year. I still recommend what appeals to me and what I think represents good design. I think people will always respond to that."