Although rumor has it that the domestic umbrella industry is all but dead, you can't prove it by New York City-based Peerless Umbrella Co. On the 11th floor of a narrow, noisy, musty building, 30 employees assemble 1,000 umbrellas a day in much the same way they did when 25-year-old Gene Moscowitz's grandfather founded the company 56 years ago. But that is where the similarity ends.

For years, Edwin Moscowitz (Gene's father) made a comfortable living manufacturing and selling umbrellas to department stores, following in the footsteps of his father. Then, in 1972, the see-through "bubble" umbrella took the industry by storm, and Peerless racked up record sales. "Right after that," says Gene, who joined the company in 1981, "the imports started flooding in, and the domestic manufacturers started going by the wayside."

Two thirds of the industry closed shop for good.

"Of the 10 or 12 umbrella companies that were left," says the younger Moscowitz, "3 or 4 went low end, and the others went high end. There was no middle ground." In 1978, his father decided to go for the high end, signed a licensing agreement to use the Yves Saint Laurent logo, and started manufacturing and selling the pricey designer umbrellas to such retailers as Bloomingdale's, I. Magnin, and Saks Fifth Avenue. But two years and several thousand dollars in royalties to the licenser later, the market was flooded with other designer umbrellas at cheaper prices. In the umbrella trade, retailers buy on consignment, and Peerless was having a tough time absorbing the cost of items returned to it.

Enter Gene Moscowitz -- described by his father as "an empire builder" -- just out of business school. Two years earlier, Peerless had been approached by Japan Air Lines Co. to make umbrellas imprinted with the company's name. "Hesitantly, my father did, because he needed the business at the time," says Gene. "He didn't see how big the [premium] industry really was. When I came in and saw that there were maybe two or three umbrella companies in that exclusively, I said, 'Let's give it a shot."

Moscowitz made up a catalog and hit the streets. Although Peerless was a late-comer, aggressive marketing earned it a respectable share of the premium business. Moscowitz pitched not only the products, but went to customers with marketing proposals in hand, giving advice on how the premiums could be used. "People took to us very well," says Gene. "We started getting some very big companies," including CBS, The New York Times, People Express Airlines, Eastman Kodak, PepsiCo, and Anheuser-Busch. The premium market now accounts for 40% of Peerless's business.

The company also began manufacturing and importing beach and patio umbrellas for such mass merchandisers as Caldor Inc. and Bradless, now accounting for 50% of revenues. Retail rain umbrellas, the part of the business that Edwin runs, is down to 10% of total sales -- enough to "keep a hand in."

The repositioning of Peerless brought skyrocketing sales -- from revenues that were less than $500,000 in 1979 to $3 million last year, placing it #481 on the 1984 INC. 500 list of the fastest-growing private companies in America. But growth has had its downside. Shipping delays, an inefficient building, and late overseas deliveries to Peerless have jeopardized the company's relationships with some key accounts. "We've got to do something," says Gene. "We've been turning down orders to catch up. That's one of the drawbacks of growing so fast."

This fall, Peerless is moving to Harrison, N.J., expanding its plant from 3,000 to 20,000 square feet and hiring 20 additional employees. The move is part of Gene's plan to make Peerless a $12-million to $15-million company in the next few years.

And what does 59-year-old Edwin Moscowitz think of all this? "Me, I'm rich enough already. I'll be here another two years to help him out, then I'll retire. My father did it to me in one day -- I'm giving this kid a break!"