Dry Cleaning and Laundry Facilities
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Industry Overview
The US dry cleaning and laundry facilities industry includes about 30,000 companies with combined annual revenue of $20 billion. Large companies include Coinmach Service, DRYCLEAN USA, Mac-Gray, and Martin Franchises. The industry includes 20,000 companies that provide retail laundry and dry cleaning services, 9,000 that provide services through coin-operated laundromats, and about 1,000 that provide commercial/industrial laundry services. The industry is highly fragmented: the 50 largest firms generate about 40 percent of revenue.
Competitive Landscape
Demand is related to growth in consumer income. The profitability of individual companies depends on efficient operations and favorable store locations. Large companies have efficiencies of scale in centralized cleaning operations. Small companies can compete successfully by owning favorable locations or providing special services. The industry is labor-intensive: average annual revenue per employee is just $60,000.
Products, Operations & Technology
Major products are consumer dry cleaning services, commercial laundry services, and coin-operated laundry services. Retail dry cleaning stores account for 40 percent of industry revenue, commercial launderers for 30 percent, and coin-operated laundromats for 15 percent. The additional remaining 15 percent of industry revenue consists of shoe and clothing repair services and washing machine "route" operators who service machines in apartments.
Retail dry cleaning operations consist of collecting and tagging clothing, operating the actual dry cleaning machinery either on the retail premises or at central facilities that serve a number of stores, and pressing, bagging, and returning clothing to customers. Average annual revenue for large retail locations is about $500,000. Commercial dry cleaners service hospitals, hotels, and restaurants. Commercial dry cleaners may provide specialized services, such as "clean room" laundry facilities that serve chemicals, semiconductor, and pharmaceutical markets.
Coin-operated laundries (laundromats) provide washers and dryers for people who don't have laundry facilities in their own home. Most are single-location companies, with annual revenue under $300,000. In addition to operating retail locations, companies install and service laundromats in private buildings such as apartment complexes or college dorms under long-term contracts (so-called "laundry routes"). Operations mainly consist of money collection and maintenance.
Equipment is the largest investment for both dry cleaners and laundromats, and includes washer-extractors, finishing and ironing machines, folders, equipment computer systems, and dryers. Usually leased or financed from manufacturers or distributors, equipment is less expensive if rebuilt rather than new, and several equipment companies specialize in rebuilding machines for resale. Typical laundromat washers and dryers cost $700 to $2,500 each, depending on capacity.
