National Linen Service Corporation

Product Details

Historical Context

The history of National Service Industries begins with Isadore M. Weinstein, who was born in New York City and raised in Cleveland, Ohio, where he eventually began working for a towel supply firm. He went to Atlanta in 1908 to look into establishing a branch there but instead decided to start his own towel supply company.

World War I intervened to delay his plans, but upon returning from service he recommitted himself to his entrepreneurial project. By this time, he had decided that he should rent linens and uniforms in addition to towels. The inspiration for this decision was said to have come to him during a stay at a French hospital where he was recovering from wounds he suffered from machine gun fire. During his recuperation, he had noticed piles of clean, ironed towels, sheets, and nurses' uniforms.

On April 1, 1919, Weinstein and a partner, Herman Gross, formed the Atlanta Linen Supply Company, with total start-up capital of $1,700. Gross sold out to his partner in 1920, but Weinstein quickly secured two new partners, Abraham J. Weinberg, an owner of a drugstore who also had been an Atlanta Linen customer, and Joseph Jacobs. In 1922 Jacobs opened the company's first branch in Birmingham, Alabama. This led the company to change its name to Southern Linen Service Corporation. More branches soon were opened in Georgia, Tennessee, North Carolina, Florida, Louisiana, and Alabama.

In 1928 the company's stock began trading over the counter, and the name was changed again, to National Linen Service Corporation. The next decade saw the firm open a number of additional branches, including outlets in Virginia, South Carolina, and Kentucky. In 1939 National Linen expanded even further geographically by opening offices in Dallas, Fort Worth, Houston, and Los Angeles. National Linen gained a listing on the New York Stock Exchange in 1944.

By this time, National Linen Service had developed into a formidable force in the linen supply industry; in addition to having a workforce of more than 4,700, the company had expanded into manufacturing - making its own linens and garments, towel cabinets, delivery truck bodies, and soap.

Positioned as one of the few large, publicly traded companies competing in a highly fragmented and densely populated industry, National Linen Service grew to such an extent that the U.S. Department of Justice intervened in the 1950s, filing an antitrust suit against the company. The suit was settled in 1956 with a consent decree that set stringent restrictions on the company's further expansion. Although the company, then led by Milton N. Weinstein, son of the founder, would continue to acquire small linen supply companies, the ruling by the Justice Department led to its diversification into other business lines, marking a significant turning point in the company's history and forever changing the scope of its operations.

The company later made a number of diversifying acquisitions, and became a holding company for all of the individual assets.

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