This is marketing research on the laundry and dry cleaning industry and can include information on the background, market structure, definitions, competitors, trends and developments of laundry and dry cleaning and is related to other topics such as clothing, pressing, ironing and washing.

Table of Contents

1 Background 
2 Market Structure 
3 Industry Definitions 
4 Market Metrics 
5 Industry Players 
6 Trends and Recent Developments 
7 Sources

Background

In the mid 1990s, there were less than 12,000 laundry and dry-cleaning establishments in the U.S. and most of theses were primarily engaged as coin-operated or similar self-service laundry and/or dry cleaning equipment on their own premises. Fewer than 1,000 were estimated as solely engaged in installing and operating coin-operated laundry equipment in apartments, dormitories, and similar locations. This numer of establishments has grown in the past 20 years to about 27,000 establishments.

In total, laundry and dry-cleaning businesses employed more than 50,000 workers with total revenues of about $20 billion in the United States.

Market Structure

In 2002, there were approximately 27,071 dry-cleaning and laundry services establishments owned by 23,967 companies.

The dry-cleaning and laundry services industry is categorized into the following types of establishments

• Family and commercial laundries (2,000)

• Dry-cleaning plants (21,273)

• Garment pressing and agents (3,497)

• Other laundry facilities (264)

This is not a high margin business. Many dry cleaners and laundry establishments are "mom-and-pop" local businesses. Attempts to "roll-up" these businesses into regional or national chains have not been met with broad success (please see Industry Players section below for recent news).

Industry Definitions

According to the 2007 North American Industry Classification System, the Dry-cleaning and Laundry Services (except Coin-Operated) comprises establishments engaged in one or more of the following: (1) providing dry-cleaning services (except coin-operated); (2) providing laundering services (except linen and uniform supply or coin-operated); (3) providing drop-off and pickup sites for laundries and/or drycleaners; and (4) providing specialty cleaning services for specific types of garments and other textile items (except carpets and upholstery), such as fur, leather, or suede garments; wedding gowns; hats; draperies; and pillows. These establishments may provide all, a combination of, or none of the cleaning services on the premises.

• Establishments that are cross-referenced in this industry are the following:

Supplying laundered linens and uniforms on a rental or contract basis, Linen and Uniform Supply;

Operating coin-operated or similar self-service laundry or dry-cleaning facilities, Coin-Operated Laundries and

• Drycleaners

Cleaning used carpets and upholstery, Carpet and Upholstery Cleaning Services.

Additionally, the following establishments fall under this industry category.

• Agents, laundry and dry-cleaning
• Apparel pressing services
• Bobtailers, laundry and dry-cleaning
• Cleaners, dry-cleaning and laundry service (except coin-operated)
• Cleaning and dyeing plants (except rug cleaning plants)
• Collecting and distributing agents, laundry and dry-cleaning
• Curtain cleaning services
• Drapery cleaning services
• Drop-off and pick-up sites for laundries and drycleaners
• Drycleaner drop-off and pick-up sites
• Drycleaners (except coin-operated)
• Dry-cleaning plants (except rug cleaning plants)
• Dry-cleaning services (except coin-operated)
• Fur garment cleaning services
• Garment cleaning (e.g., fur, leather, suede) services
• Hand laundries
• Hat cleaning services
• Laundries (except coin-operated, linen supply, uniform supply)
• Laundry and dry-cleaning agents
• Laundry drop-off and pick-up sites
• Laundry services (except coin-operated, linen supply, uniform supply)
• Leather garment cleaning services
• Pickup and drop-off sites for drycleaners and laundries
• Pillow cleaning services
• Power laundries, family
• Suede garment cleaning services

Market Metrics

Laundry and dry cleaning services in the United States include about 27,000 establishments. Total revenue for this industry is almost US $20 billion annually. This is a highly fragmented industry with the top 50 companies controlling less than 40% of the market. This sector is generally highly labor-intensive. Average revenues per employee in the U.S. are about US $60,000 while the average dry cleaning establishment has revenues of approximately US $500,000. Commercial laundry establishments servicing the healthcare or hospitality industries have annual revenues of around US $5 million and coin-operated laundries reach around US $300,000 in revenue.

Dry cleaning stores account for about 40 percent of total industry revenues, while commercial laundering services are responsible for about 30 percent and coin-operated laundromats for about 15 percent of industry revenues. Miscellaneous other firms such as washing machine "route" operators who service laundry machines are responsible for the remaining 15%.

This is not a capital intensive industry. The largest capital investment for the industry is for laundry equipment which includes washers, dryers, ironing machines and folders. A typical commercial washer or dryer can cost from $500 to $2,500 each.

Again, on the other hand, this is not a high margin business either. Industry financials for larger chains, for example, has seen profit margins of less than 5%.

Industry Players

Key players in the laundry and dry cleaning services industry include Dryclean USA, Zoot and SpinCycle. SpinCycle was recently acquired by PWS. Most of SpinCycle sales, however, are generated by its unit Steiner-Atlantic, which sells coin-operated laundry machines, garment presses, and other laundry equipment. The majority of these products are sold under the Aero-Tech, Green-Jet and Multi-Jet brands names to approximately 750 customers.

Dryclean USA’s other divisions offer business brokerage and turnkey development of new dry cleaning businesses. Growth for the company has been flat. The firm does approximately $22 million in annual revenue with a profit of less than $1 million annually. A large shareholder, the Steiner family, proposed buying out the company in December 2008. The company has a market capitalization of less than $6 million in February of 2009.

Zoots serves 50,000 customers a week through about 75 dry-cleaning outlets and 115 home delivery routes in Connecticut, Massachusetts, New Hampshire, New Jersey, Rhode Island, and Virginia. Zoots touts that the fact that the company doesn't dry clean with perchloroethylene, a carcinogen typically used in the process. Adding to its dry-cleaning holdings, Zoots acquired rival Sarni Cleaners in the mid-2006. Zoots is owned by venture-capital firms after being founded in 1998 by former CEO Todd Krasnow and Tom Stemberg, both former Staples executives. Zoots in 2008 was in a process of reorganization. Its founders had departed and the 3 largest regional Zoots organization were in the process of potentially being sold off. The Boston based Zoots organization with 350 employees had been sold in 2008.

SpinCycle is a laundry chain operation with 70 air-conditioned laundromats in major market (16 states and Washington, DC). About twice the size of the average mom-and-pop operation, the facilities have more than 100 washers and dryers, full-time attendants, and TVs at each folding station. SpinCycle offers wash-and-fold services, dry cleaning and laundry products. In late 2003, the firm was acquired by PWS.

PWS is a coin laundry retailer and services firm that develops stores under the trade names of Launderland, SUDZ, Lucy's LaundryMart, and SpinCycle. PWS claims to have as many as 3000 laundry outlets, many on the U.S. West Coast. It is owned by PWS Investments. In addition to stand-alone operations, the company sets up laundry rooms for apartments and dormitories and runs on-premise facilities for hotels, motels, colleges, and other entities. PWS also sells laundry equipment and parts and refurbishes existing laundry operations. The company is expanding into new regions by purchasing smaller laundry chains. PWS was founded in 1968 by coin laundry operators Morton Pollack, John Wickham, and Bernie Steinberg.

Trends and Recent Developments

There has been some negative publicity in 2008 to the industry as dry-cleaning establishments have seen bad press concerning the use of chemicals in the dry-cleaning process. There may be further immpact as the green movement extends its gains and environmental concerns are further embraced by the consumer.

In the financial area, this industry has constantly focused on further automation to enhance margins. Coin operation was introduced early in the process and other new technologies including machine-readable cards that operate aundromat washers and dryers instead of coins are being introduced.

The economic recession begun in 2008 may be having an impact on local dry cleaning and laundry establishments, but its impact may be mixed. Although consumers may reduce higher priced services such as delivery of personal laundry, larger laundry users such as hotels, restaurants and healthcare facilities may see increases usage as they attempt to reduce internal labor costs. It is not likely 2009 and 2010 will have a major negative impact on the overall industry.

Sources

Bureau of Labor Statistics

U.S. Census Bureau