CHICAGO — Drycleaners are offering a variety of commercial services, according to the most recent survey appearing in the Wire, American Drycleaner’s e-mail newsletter. And one-quarter (25.9%) of respondents say they’re planning to go after more hotel, restaurant, uniform and other commercial work soon.
Three-quarters of respondents (75.0%) say they perform retail work on behalf of local hotels and motels, picking up and processing guests’ drycleaning. Coming in second was uniform services, with 55.0% of respondents, and 30.0% clean restaurant and food-service linens. One-fifth (20.0%) of drycleaners clean and launder hotel/motel linens and napery, and one-fifth process linens for healthcare facilities.
Asked whether they plan to add any commercial services or expand existing capacity devoted to commercial work in the next 12 month, 25.9% said “Yes;” 25.9% said they weren’t sure; and 48.1% said “No.”
While commercial work can help fill a plant even when retail drycleaning business is hurting, profits may be difficult to find, survey participants said. On average, those responding to the survey attributed 20.5% of their gross sales to commercial work, but only 14.3% of their profits.
Asked what challenges commercial services present, operators said offering hotel guest-services work can be frustrating, since it demands fast turnaround times and offers low profit margins. “Everyone wants a deal,” an operator who recently discontinued his plant’s hotel services said. Hotels want “the cheapest price on guest services, so you make no money, then the managers want their clothes done for free, so you lose money.”
Most respondents added that they would recommend commercial services only to operations that have the extra capacity necessary to handle new work, extra space for storage, delivery vehicles and the ability to take on new employees. “If you have all of the above, absolutely!” one said.
Having a cash cushion can help, too, operators indicated, since commercial cashflows fluctuate and receivables often lag. “I would recommend them as a cost-effective way to increase revenues without having to take on additional fixed expenses,” one operator said. “Just keep on top of receivables — they can be a problem.”
But in challenging economic times, commercial work can also shore up business when retail business is flagging. “I would recommend this sideline to other operations,” one drycleaner said. “During slow periods of the drycleaning season, the other services keep us busy.”
While the American Drycleaner Wire survey presents a snapshot of readers’ viewpoints at a particular moment, it should not be considered scientific.
Subscribers to American Drycleaner’s Wire e-mails — distributed weekly — are invited to participate in an industry survey each month. The survey is conducted online via a partner website. Each survey is developed so it can be completed in 10 minutes or less. Readers are encouraged to participate, as a greater number of responses will help to better define operator opinions and industry trends.
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