Four Seasons Hotels was founded by Isadore "Issy" Sharp, born on October 8, 1931.Sharp's father, Max, emigrated from Poland to Palestine in 1920, where he helped build one of the first kibbutzim. Relocating to Toronto five years later, Max worked for a few years as a journeyman plasterer; he married and began a family that would include his son Issy and three daughters. Drawing on his home renovation experience, Max Sharp soon began purchasing houses, repairing and decorating them, and then selling them at a profit. Issy Sharp had lived in 15 houses by the time he was 16 years old. He married Rosalie Wise and they have three sons, Jordan, Gregory and Anthony. They lost a fourth son, Christopher, to melanoma cancer in 1978. [Iverson,1996.] In 1952, he graduated from Ryerson Institute of Technology with a diploma in Architectural Technology. He founded the Four Seasons Hotel in 1960 and opened the first hotel on Jarvis Street in downtown Toronto in 1961.He helped start and is the director of the Terry Fox Run. Sharp invited Fox to rest in one of the city's Four Seasons hotels for a week before resuming his run, helped pay for his medical treatment, and later pledged to contribute to research funds on his behalf.[Staley 2007] Five years later, in 1961, Sharp did open a hotel of his own, in what was then the seediest district in Toronto. Everyone said it was a bad idea. Still requiring over $700,000 in capital, Sharp approached one of his father's business acquaintances, Cecil Forsyth, who managed the mortgage department at Great West Life Insurance Company. Sharp's plan was to raise the rest of the necessary funds through a mortgage. [Weber 1997] From the time the Four Seasons opened for business, Sharp created a climate that fostered professionalism and devotion among his employees. One of the more notable examples of employee dedication involved Roy Dyment, a bellboy at Four Seasons since 1967. Dyment discovered that a dignitary had left his briefcase behind after checking out, and he felt responsible since he hadn't placed the briefcase in the limousine trunk.[Kummer 1990].
Financial Ups and Downs in the 1980s
Many hoteliers, Sharp included, followed Conrad Hilton's strategy of managing properties rather than owning them. From 1980 to 1985, Four Seasons opened hotels with a value of over $500 million at a cost of only $15 million. Nevertheless, Four Seasons also owned many properties, and in the early 1980s Sharp initiated an expensive renovation drive of the hotels in which it was owner or part-owner. By 1982, the hotel chain had approximated $116 million in long-term debt. In order to lessen this debt, Four Seasons began selling its assets. Between 1980 and 1985, nearly $31.2 million worth of assets were sold, including equity in Montreal, Toronto, and San Francisco. Nevertheless, Four Seasons continued to manage these hotels under long-term contracts. When Sharp, Creed, and Koffler, the three original investors, created a new company to manage such non-hotel assets as development property and a laundry, another $22 million in debt was eliminated. The company's final tactic was to apply $30 million of an initial $60 million raised from a stock offering to reducing the remainder of the debt. Through these three moves, Four Seasons' debt-equity ratio was reduced to a comfortable 1:1 ratio by 1986. When Four Seasons first publicly issued shares in the company in 1969, stock shares climbed as high as $22. However, after the erratic management and declining profits of the early and mid-1970s, Four Seasons stock had plummeted to only four dollars per share by 1977. Sharp and his partners then decided that it was in their best interest to turn Four Seasons into a private company. In 1985, when they decided to take Four Seasons public again, both Creed and Koffler retained an eight percent stake in the company but sold $8.5 million worth of stock. Sharp agreed to the public offering on the...