By Bonnie Johnson
Updated October 07, 1985 12:00 PM

In 1977, when they first opened The Silver Palate, a tiny take-out shop on Manhattan’s not-yet-trendy Upper West Side, Sheila Lukins, the owner of a catering business, and Julee Rosso, an advertising executive, thought the store would be just a hobby. That notion lasted about as long as the potato salad, baked ham, ratatouille and chocolate mousse-which the neighborhood’s pre-Yuppies devoured every night off the shop’s butcher-block shelves.

The turning point came during a torrid heat wave, on the evening of a free concert in Central Park. “I had made an incredible amount of chicken salad,” recalls Lukins, “and Julee sold it all. The air conditioner went off in the store, and it was 105 degrees. But people still kept pouring in.”

They haven’t stopped. Today the only thing small about The Silver Palate is its size-a cozy 11 feet by 16 feet. The staff now numbers 44, and Lukins’ and Rosso’s initial investment of $7,000 apiece (augmented by another $7,000 from a third partner who dropped out after six weeks) has exploded into an estimated $10 million a year business. In addition to the store Lukins and Rosso run a full-service catering operation and produce a line of bottled and packaged goodies, including blueberry vinegar ($5.50 for 12 oz.), caramel pecan sauce ($8 for 12 oz.) and plum chutney ($7 for 12 oz.). Their 122 products are sold in more than 1,500 stores across the country and in England, Australia and, soon, Japan.

A cookbook was the next logical step, and in 1982 the women published The Silver Palate Cookbook (Workman, paper, $10.95). Filled with more than 350 recipes, it made cookbook history with more than 870,000 copies in print after just three years. (That unexpected success recently led Michael McLaughlin, a former employee and an associate on the project, to sue Rosso and Lukins for a share of the royalties.) A sequel, The Silver Palate Good Times Cookbook (Workman, paper, $11.95) came out last May and has been on the New York Times best-seller list for 14 weeks. It follows the same format as its predecessor, but the recipes-such as a golden caviar soufflé for New Year’s Eve or swordfish marinated with lime and coriander for a summer cookout-are pegged to seasonal fêtes.

Rosso, 41, and Lukins, 42, attribute their success to their personal involvement in every aspect of the business. In the beginning years, while Rosso did the accounting and ran the store, Lukins cooked everything herself in her apartment two blocks from the shop. “I woke up every morning at 6,” she recalls. “I never even got out of my nightgown. I just went right to the stove and cooked all day.”

As sales soared, however, Lukins was forced out of her kitchen. The food is now produced fresh daily in a nearby commercial kitchen while the pre-packaged goods are made in three different factories. The trickiest part of their expansion was translating their recipes into larger quantities. These days the food is made in 30-to 50-gallon batches, and Lukins is constantly refining the proportions. Their best-selling item, Sweet & Rough Mustard, for example, was revised 43 times before Rosso and Lukins were satisfied with the results.

Neither woman was raised on gourmet cooking. Rosso, who is single, had a meat-and-potatoes upbringing in Michigan, where she developed an interest in cooking from her maternal grandmother. After graduating from Michigan State University, she moved to Manhattan and began her career in advertising, first with Bancroft & Sons and eventually with Burlington Industries. Similarly, Lukins’ culinary inspiration was her grandmother. But the onetime graphic artist, a Philadelphia native who grew up in Westport, Conn., didn’t parlay her fondness for food into a career until she married Richard Lukins, owner of a security guard company. (The couple has two children, Annabel, 12, and Molly, 10.) That’s when she began The Other Woman Catering Company, which supplied meals to single men. Her motto was, “So discreet, so delicious and I deliver.” Lukins met Rosso in 1976 when Julee hired her to cater a press breakfast. A month later they became partners.

Rosso and Lukins regularly add new items to the Silver Palate line (Good Time Cheers drink mixes are a recent addition) and hope one day, says Rosso, to become “a big company.” Toward that end they recently sold part of the business to venture capitalists. This has sparked rumors that Rosso and Lukins are either splitting up or selling out. “No way,” says Rosso. “We’re like an old married couple, and we love what we’re doing.”