Early history and expansion
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's Woodfords Corner[15] and then a nightclub in Scarborough, Maine which he then converted into a restaurant.[12] Valle next expanded to Kittery, Maine where he constructed his first restaurant that was custom designed as a steak house.[3] 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.[10] 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.[13]
By 1970 the company had expanded into Rhode Island, Connecticut, and New York and was experiencing record earnings growth.[16] 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.[17] Several months after the offer, negotiations collapsed.[18] 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.[7] 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.[19]
One of the company's locations was in Saugus, Mass adjacent to the Hilltop Steakhouse that was, for a period of time, the highest grossing restaurant in the United States and often had a waiting time for a table that exceeded an hour.[20] While the Valle's location in Saugus was successful, it was also mocked as "...the place to go when you couldn't get into the Hilltop."[21]
The Braintree, Mass Valle's was the fifth restaurant in the chain to open and one of the busiest. On Thanksgiving Day 1979, the Braintree location "... prepared 1,200 pounds of turkey to serve to an expected 2,000 customers", for a holiday that was only their "... fifth busiest day of the year for the restaurant, behind Mother’s Day, Christmas, Easter, and New Year’s Day.[22]
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."[23] By 1977 both revenues and profits had begun to decline.[24]
