A friend suggested they call their company 'Barrel and Crate', but Carole thought they should reverse the order of the words. The Segals derived the company name by the materials that they originally used to display items in their Chicago store. To this day, a majority of Crate & Barrel's products are direct imports from Europe, though Thai, Mexican and Indian glass and textiles can also be found in their stores. The Segals sought out small European companies that were not represented in America and negotiated direct purchases from these factories that could be sold to the consumer while avoiding a wholesaler's markup. The first store opened in response to a flourishing of world trade in home furnishings due to the early 1960s, round of talks about the General Agreement on Tariffs and Trade. They traveled throughout Europe buying directly from glassblowers, ceramicists and factories making French copper pots and simple white bistro dinnerware. The Segals started by recruiting an employee and leasing an abandoned elevator factory on Chicago's Wells Street. Surprised to see that European manufacturers offered many beautiful and durable products at reasonable prices, they were inspired to start their own store in the United States. They became interested in providing functional yet aesthetically pleasing products to young couples just starting out. The inspiration was their honeymoon in the Caribbean, where the Segals saw inexpensive yet tasteful European household products for sale. The 1,700-square-foot (160 m 2) space in part of an old elevator factory was located at 1516 North Wells Street in the then- bohemian Old Town neighborhood of Chicago, Illinois.

Gordon and Carole Segal opened the first Crate & Barrel store on December 7, 1962, at age 23.

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