Valle's Steak House

Private until 1968 public offering; subsequently went private in a 1982 leveraged buy out
Industry Dining
Fate Sold off assets to private investors
Founded 1933
Defunct 2000
Headquarters Newton, Massachusetts
Key people
Donald Valle, Richard Valle, Judith Valle, and Arthur W. Hanson
Products Valle's Steak House specialized in prime steaks and lobsters
Revenue $69.5 million in 1981 (peak earnings)
Number of employees
3,600

Valle’s Steak House was an American chain of restaurants that operated on the East Coast of the United States from the 1933 to 2000. The chain's menu focused on steaks and lobsters. A family run business, Valle’s aggressively expanded during the early 1970s but was unable to weather the financial challenges of the gas crisis and the resulting economic downturn; increasing labor costs, the death of its founder, and the changing dining habits of its customers. The last Valle’s Steak House closed in August 2000.

Key personnel

Business model

Match book cover that featured Valle's "Circle V" Ranch in Wyoming

Valle’s Steak House operated as a full-service, high volume, low margin restaurant that emphasized prime steaks, fresh seafood, and Maine lobsters. Each of the restaurants was built to seat between 800-1400 customers.[7] A large wait staff trained to provide prompt service allowed for a fast turnover of tables by keeping the average dinner time to less than an hour.[2] By the mid 1960s the Boston area restaurants alone were serving over 12,000 lobsters each Friday night as part of their double lobster special and the chain was serving over 40,000 lobsters a week.[8][9]

Early in his career, Donald Valle bypassed regional meat suppliers and established exclusive agreements with Swift and Company in Chicago which shipped beef directly by rail car to his Maine restaurants.[10] Vertically integrated, most of the company’s beef originated from Valle's own ranch in Wyoming called the “Circle V” and was then shipped to slaughterhouses in Chicago.[9] Valle also invested heavily in making his restaurants efficient. In a 1965 interview with the Boston Globe Richard Valle showed off a $50,000 automatic dishwashing machine located in the kitchen of the chain’s new $1.5 million Braintree, Massachusetts, restaurant. Valle also pointed out the row of broilers and the large, in-house bakery that allowed the Braintree location to serve 5,000 customers a day.[8]

Donald Valle had a reputation as a tireless worker and expected the same level of effort from his employees. Once, when taking a group of restaurant owners through one of his steak houses, Valle pointed out how trim his workers were because they stayed so busy. When one of the visitors pointed to a heavy set employee, Valle joked "He's new. Come back in a couple of months and you will see he's slimmed down."[11]

"Training at Valle’s was like going through boot camp but without all the pushups. It lasted six months. During that time they worked you like a rented mule. Not many trainees actually finished. You had to know the restaurant inside and out."[12] -- Former Valle's manager

Valle's business model emphasized food over liquor with food accounting for over 85% of the company’s revenues.[9] "We haven't been in the business since 1933 from selling liquor but good food and good service." Richard Valle said in a 1980 interview.[7]

Early history and expansion

After operating a small cafe, Donald Valle purchased a larger restaurant in Portland, Maine and named it "Valle's Steak House"

Valle’s Steak House began as a 12-seat café in Portland, Maine in 1933. The cafe was purchased at the end of Prohibition by Donald Valle. The cafe was successful and allowed Valle to purchase a larger restaurant in Portland and then a nightclub in Scarborough, Maine which he then converted into a restaurant.[9] Valle next expanded to Kittery, Maine where he constructed his first restaurant that was custom designed as a steak house.[2] In the mid-1960s Valle expanded to Massachusetts where he established three Boston-area steak houses in Saugus, Newton, and Braintree. They became, and remained, three of the busiest restaurants in the chain.[8] In 1968 the company went public and its shares were listed on the American Stock Exchange. By 1969, Valle's was serving over 200,000 customers a week, had 1,300 employees on its payroll, and had created and issued over 6,000 of its own credit cards.[11]

By 1970 the company had expanded into Rhode Island, Connecticut, and New York and was experiencing record earnings growth.[13] The success of the company attracted a buyout offer from the Campbell Soup Company. At the time of the offer, Valle’s was operating 12 restaurants in Maine, Massachusetts, Rhode Island, Connecticut, and New York and had five additional restaurants being developed. For the financial period ending on March 31, 1970, Valle’s had netted $1,448,000 on sales of $19,200,000. Campbell offered to purchase all of the company’s assets and assume its liabilities for $38,900,000.[14] Several months after the offer, negotiations collapsed.[15] In the wake of the collapse, Donald Valle stated that the level of control demanded by Campbell would have been detrimental to the continued success of the chain.[6]

Valle's Steak House headquarters was in Newton, Massachusetts

In 1972, the company had begun construction on two additional steak houses in the Washington, D.C. area, plus another restaurant in Atlanta. Plans for restaurants in Yonkers, Philadelphia, Fort Lauderdale, and Daytona Beach had been approved and construction was slated to begin in 1973. Valle’s had also agreed to sell a parcel of land next to its Hartford restaurant to a national motel chain for $325,000 and to serve as the hotel’s sole banquet, lounge, and dining facility.[16]

Revenues and earnings continued to grow into the mid-70s but at a slower rate. Growing inflation, unemployment and rising gas prices caused Richard Valle to warn investors that although the company would continue to expand, earnings would not be able to maintain their momentum. ”Inflation, the cautious attitude of the consumer, and the energy crisis are uncertainties facing the industry.” [17] By 1977 both revenues and profits had begun to decline.[18]

Economic challenges, declining sales, and closure

Donald Valle’s death in 1977 saddled the Valle family with an estate tax bill it was not prepared to pay.[19] Combined with declining sales and increasing costs from the firm's continued expansion, in 1981 Richard and Judith Valle attempted to sell their controlling shares in the company to a group of non-family executives and private investors for $17,500,000. Two different proposals were provided to shareholders over a 24-month period. At the time of the proposed sale, the Valle family and its trusts owned 66.7% of the company’s 2.5 million common stock shares outstanding. The company was operating 32 restaurants that despite generating $65,900,000 in sales, had lost $569,000 for the year ending on March 31, 1981.[20] During the effort to sell their shares, Richard Valle stepped aside as president of the company. In his place, Arthur W. Hanson, 54, formerly executive vice president of operations became president and also acquired the newly created title of chief executive officer. Richard Valle described the change as “the start of [a] regrouping” that would allow him to focus on the firm’s long term strategy as the chairman.[21] Prior to the finalization of the buyout, Valle's had already begun to close restaurants for this first time in its history. Among those that were closed was the Rochester, New York store that had opened in 1971 and had never turned a profit.[7]

The Valle's in Kittery, Maine was the first custom built restaurant in the Valle's Steak House chain and was among the last to close.

After the buyout, the chain continued to sell off properties. Between 1982 and 1984 the company sold all of its Florida locations, none of which had been open for more than seven years.[22] By the mid-1980s some of the company's largest restaurants outside of Florida had also closed to include Fall River,[23] Atlanta,[24] and Miami.[25] The Portland restaurant was among those that were sold in 1983 when Judith Valle, using funds from the buyout, purchased the Portland Valle’s Steak House from the company and operated the restaurant as an independent entity. Another important development in 1983 was Arthur Hanson creating the Polar Bear Restaurant Corporation headquartered in Needham, Mass as the parent corporation of the remaining restaurants. By agreement with Judith Valle, she was allowed to use the "Valle's Steak House" name for her Portland restaurant.[6][26][27]

The last three Valle’s Steak House restaurants operating as part of Hanson’s corporation closed on Friday, December 27, 1991. The restaurants were located in Kittery, Maine; Andover, Mass; and Hartford, Connecticut.[28][29][30]

Judith Valle’s restaurant continued operating in Portland as “Valle’s Steak House” until it finally closed its doors on Sunday, August 20, 2000.[6]

Factors and events contributing to the closing

A number of reasons contributed to the decline of the Valle’s Steak House chain.

Valle's sign outside of the Albany, New York restaurant. Photo courtesy of Saxton Signs, Castleton, New York.

Valle's was also faulted for the straight line architecture of its large dining rooms that caused some critics to compare the restaurant to a cafeteria.[34] Other critics questioned the wisdom of using a regional New England menu in southern locations such as Atlanta where customers of the early 1970s were unfamiliar with clam chowder, baked stuffed lobsters, and New England-style pot roast.

"In 1972 ... Atlanta wasn't as cosmopolitan as it is today. It was still very Southern. The idea of a Northeastern steak house didn't really excite people there. I can't tell you how many times people would ask, 'Where's the fried chicken? Where's the mac and cheese? Where are the collard greens?"[12]--Former Valle's manager

Aftermath

Valle’s Steak House was a landmark East Coast restaurant for decades and continues to be discussed in various articles and on blog sites.[35][36][37] Artifacts from the chain are sold widely on e-bay and other web sites.

"Valle's Steak House, once located at 465 William S. Canning Boulevard, Fall River, has been gone for nearly 30 years but still brings back fond memories for many locals. The restaurant opened without much fanfare in time for Christmas in late December 1970. It served up steaks and a variety of lobster dishes, braised shortribs with sauce Jardiniere and remember the Bloody Marys? When the Fall River Valle's opened, it was one in a small chain founded in 1933. By the time it closed, there were more than 30 Valle's along the East Coast." -- 2012 article from the Fall River, Mass "Herald News"[23]

Since 1991, many of the Valle’s restaurants have been razed or, in some cases, repurposed. The Andover location which was among the last to close, still stands and has been used as a comedy club and a bar and grill. As of 2013 it is a part of the Massachusetts-based Italian restaurant chain named "Chateau." [38] The Braintree restaurant that was once the largest and one of the busiest in the chain subsequently became a “Hilltop Steakhouse” and served in that capacity until 2006 when it was torn down to make way for a Toyota dealership.[39][40]

References

  1. "Donald Valle, Founder of Restaurant Chain" (September 19, 1977) The Washington Post, page C4
  2. 2.0 2.1 2.2 2.3 Kneeland, Paul (September 18, 1977) "Donald Valle, Of Steak House Chain" The Boston Globe, page 73
  3. 3.0 3.1 Sloane, Leonard (November 11, 1980) “Valle Successor Named” The New York Times, page D2.
  4. Long, Tom (July 11, 1995) “Richard D. Valle, operated chain of steakhouse restaurants; at 64” The Boston Globe, page 19
  5. 5.0 5.1 Cuff, Daniel F. (May 26, 1982) “Valle Family Members to Become Consultants” The New York Times, page D2
  6. 6.0 6.1 6.2 6.3 Weinstein, Joshua (August 21, 2000) "Valle's Eatery Closes" The Portland Press Herald, page 2b
  7. 7.0 7.1 7.2 7.3 7.4 7.5 FitzGerald, Joan (July 8, 1980) "What's Cooking Down at Valle's" The Boston Globe, page 1
  8. 8.0 8.1 8.2 Value, John B. (February 2, 1965) “They All Stay Trim Keeping Others Fed” The Boston Globe, page 21
  9. 9.0 9.1 9.2 9.3 ”Beef is King at Valle’s Steak House” (June 25, 1967) The Boston Sunday Globe, page D-10
  10. ”Valle’s at Portland is Largest Steak House” (September 21, 1952) The Boston Sunday Globe, page A21
  11. 11.0 11.1 Haskell, David (October 17, 1969) "Shined Shoes, Now a Millionaire" Cumberland Evening Times, page 10
  12. 12.0 12.1 Holtham, Will (2011) Home Port Cookbook: Beloved Recipes from Martha's Vineyard. Guilford, Connecticut: Globe Pequot Press, page 12
  13. "Valle's Sees Record Net, Peak Sales" (May 23, 1970) The Boston Globe, page 13
  14. Hammer, Alexander R. (October 13, 1970) “Campbell Seeking Valle’s” The New York Times, page 65.
  15. Smith, Gene (December 8, 1970) “Companies Take Merger Actions” The New York Times, page 71
  16. “Quarterly Gains Listed By Valle’s Steak House” (November 13, 1972) The Schenectady Gazette, page 42
  17. ”Valle’s” (July 31, 1974) The Boston Globe, page 12
  18. ”Corporate Reports – Valle’s Steak House” (May 21, 1977) The Boston Globe, page 13
  19. ”Valle Family Announces Plan to Sell Chain of Restaurants” (November 22, 1981) The Boston Globe, page 1
  20. “Company News – Valle Family Plans Steak Chain Sale” (November 24, 1981) The New York Times, page D4.
  21. Mohl, Bruce A. (November 11, 1980) "Valle’s Changes Managers" The Boston Globe, page 1
  22. "Valle's Restaurant Sells for $1 million" (June 6, 1984) The Evening Independent (St. Petersburg, FL) page 14
  23. 23.0 23.1 "Valle's Steak House, opened in 1970 and demolished in 1984" (August 6, 2012) The Herald News (Fall River, Mass.)
  24. “Weinberg/Matheson to build $3.5 million warehouse” (October 1, 1987) The Atlanta Constitution and Journal, page K-6
  25. “Local Owners Give Small Town Touch to Banking” (June 25, 1986) The Miami Herald
  26. ”Polar Bear Restaurant Corporation” Bizapedia, retrieved February 23, 2012
  27. "Correction" (December 31, 1991) Meridien Record-Journal (Meridien, Conn.), page 2
  28. “Valle’s Restaurant Chain is No More” (December 28, 1991) The Day (New London, CT), page A-2
  29. “Last Two Valle's Restaurants Closed” (December 29, 1991) The Boston Globe, page 30
  30. Johnson, Joanne (December 28, 1991) ”Valle's Steak House In Hartford Goes Out Of Business” The Hartford Courant
  31. Campbell Steve (June 9, 2000) "House to weigh repeal of federal 'death tax' Critics say the estate tax forces heirs of small businesses and farms to sell; supporters say repealing it will only help the rich" The Portland Press Herald, page 1a
  32. "Collins Lauds Law Easing Estate Tax" (August 6, 1997)The Portland Press Herald, page 3b
  33. FitzGerald, Joan (August 3, 1982) "Valle's Sales Off 16% in First Quarter" The Boston Globe, page 1.
  34. Spinazzola, Anthony (July 31, 1975) "Let's Eat Out" The Boston Globe, page A-6
  35. Chowhound "Search for Valles ..."
  36. "Steakhouses in Massachusetts in the 1970s?" Roadfood.com
  37. Barlette, Kristi Gustafson "Things I miss having in the Capital Region" Albany Times Union
  38. "The Last Laugh at Comedy Palace"
  39. "Largest Valle's Opens in Braintree" (May 8, 1964) The Boston Globe, page A4
  40. Collins, Rick (March 8, 2006) "Last roundup: Hilltop in Braintree to close; Famed eatery will make way for Toyota dealership” The Patriot Ledger, page 1