The story
Founded by Samuel S. Childs and William Childs in 1889, in New York City.1
Founding
The first Childs Restaurant was launched in 1889 by brothers Samuel S. Childs and William Childs, on the ground level of the Merchants Hotel at 41 Cortlandt Street (between Broadway and Church Streets, on the current site of the World Trade Center complex) in Manhattan's Financial District. The brothers' concept for the establishment was to provide economical meals to the working class, quickly, and with an unusually high emphasis – for the period – on cleanliness and hygiene. Their novel design featured white tiles, white uniforms, and female servers rather than the then-common male servers. In addition to these signature characteristics, Childs locations also featured their pancake griddles in the front window. Within five years, Childs had grown to five profitable locations. They also are credited as inventors of the "tray line" self-service cafeteria format, which they introduced in 1898 at their 130 Broadway location.
In 1898, the brothers, confident and ready for more aggressive expansion, combined with several investors to legally incorporate the Childs Unique Dairy Company, with capitalization of $1,000,000, and the stated intent to "establish and operate restaurants in New York City and elsewhere". It was widely speculated, and finally confirmed in 1912, that several officers of the Standard Oil Company were investors in the restaurant chain, including Henry Morgan Tilford and Charles Sweeney.
In 1899, F.O. Hendrick, a nephew of Samuel and William Childs, launched a casual luncheon restaurant at 142 Fulton Street, practically across the street from his uncles' first location on Cortlandt Street, which was by then ten years old and highly successful. After a short period of family competition, Hendrick ultimately brought his restaurant under the Childs umbrella. He remained an operating executive of Childs Restaurants until the family lost control.
In 1906, fifteen similar restaurants (called "green doors"), independently owned and operated by Ellsworth Childs (brother of Samuel and William), were consolidated into the company. Thereafter, Ellsworth remained an executive of Childs until he died in 1929, and is cited as a driving force behind the physical expansion during that period.
Peak years
In September 1919, the company launched an employee stock ownership plan for its restaurant managers, and three years later, extended the plan to all employees. Within 10 years, employees would own almost 25% of the company's common stock.
In November 1920, an article in The Magazine of Wall Street, entitled "Where Everybody Eats Now and Then," called Childs "a national institution. Millions of people eat there at least once in a while and some eat much more often.... Most of the people who go into Childs' go in for quick lunches but you can get anything there from a doughnut to a steak."
By 1925, the chain operated 107 locations in 29 cities, served 50,000,000 meals every year, and was reporting consistent annual profits of $2,000,000. The company also grew to include other real estate interests. In March 1925, company president Samuel S. Childs died. However, he had not been personally involved in the business for some time, instead focusing on his political career and many other civic and business activities. Operation of the restaurants had long been delegated to his brother and co-founder William, as vice president and general manager, and other family members.
The late 1920s witnessed a roller-coaster of events for the company. In November 1925, the Childs company became a major partner in the development of the landmark Savoy-Plaza Hotel, at Fifth Avenue and 59th Street. Around 1927, William Childs began to impose his vegetarian dietary preferences on the chain's menu, which generated significant backlash from customers and his fellow managers and investors. The company's stock reached a low of $44 in 1928, and during a board meeting on December 12, 1928, William was pressed into resigning as president, but remained chairman of the board. At the following board meeting on January 30, 1929, William attempted to turn the tide by firing several executive officers and company directors, replacing them with family members. A proxy battle ensued, but on March 7, 1929, William and his supporters lost the fight to retain control of the company he co-founded 40 years before, by then valued around $37,000,000. He did retain a modest non-controlling equity position, which he eventually sold and/or bequeathed.
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Decline and rebirth
In the 1930s, no longer under the direction of the Childs family, the chain returned meat to its menus, introduced alcohol at many locations (after the repeal of Prohibition), and launched a new subsidiary division called "The Host", meant to be lower-priced than Childs. The company also obtained a hot dog vending license for the 1939 World's Fair in Flushing Meadows, which proved to be a financial mistake.
In August 1943, under pressure of significant debt maturity, the company filed for bankruptcy reorganization. Childs emerged from bankruptcy in 1947, and continued to operate through the 1940s and 1950s.
By 1950, the company had shrunk to only 53 locations and was losing money. Nonetheless, it managed to acquire the candy and ice cream maker Louis Sherry Inc.; it announced several significant operational changes, including "returning to its old custom of flap-jack making in the windows" and the introduction of prepared meats to eliminate the need for on-site butchering.
In 1955, a young hotelier named A.M. "Sonny" Sonnabend assumed the presidency of the Childs company and pointed the enterprise in a new direction. In a series of coordinated transactions, the company's name was changed to Hotel Corporation of America, it acquired the Plaza Hotel in New York (across the street from the Savoy-Plaza Hotel, which Childs had developed), and entered into long-term leases for three other hotels in Boston, Cleveland, and Chicago. The company was then structured into three divisions: restaurants, manufacturing and distribution of packaged foods (via subsidiaries Recipe Foods, Fred Fear, and Louis Sherry), and hotels.
In 1961, substantially all of the remaining Childs restaurant operations, now greatly diminished in number and considered part of the company's past, were sold to the Riese Organization (National Restaurants Management Inc.), which as of 2009 operates more than 100 restaurants throughout New York City, including franchised units of Dunkin' Donuts, KFC, Pizza Hut, T.G.I. Friday's and Houlihan's. A number of the Riese properties are former Childs Restaurants.
In 1970, Hotel Corporation of America (formerly Childs) was again renamed, to Sonesta International Hotels Corporation (Nasdaq: SNSTA). As of 2009, the company operates 25 hotels on three continents, and owns several cruise ships, and is still led by the Sonnabend family.
From Wikipedia’s article on Childs Restaurants, shared under CC BY-SA 4.0.4