Dry Cleaning & Laundry Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 14,700 dry cleaners in the US provide services to clean and maintain clothing and home furnishings, such as drapes and bedspreads. Services are provided to both individual consumers and commercial accounts and include cleaning, alterations, and repairs. Most firms are independently owned, but may operate as franchisees of national chains.
Changing Regulations
Industry regulation of Perc (perchloroethylene) is continuing to become more stringent.
Green Cleaners as Market Opportunity
Some dry cleaners are using growing opposition to Perc as an opportunity to operate in a more environmentally-friendly way, and advertise their “green” status.
Industry size & Structure
An average dry cleaner has fewer than 10 employees and generates $440,000 in annual revenue.
- The US has about 14,700 firms with about $7.8 billion in annual revenue.
- The average establishment has over $100,000 worth of equipment, and spends around $7,000 a year on advertising.
- Dry cleaning establishments may be independently owned or operate as a franchise of a national chain.
- Segments include cleaning services for individuals and businesses, reselling, and alterations.
- Large companies include DryClean USA, Tide Cleaners, Comet Cleaners, and Martinizing Dry Cleaners.
Industry Forecast
Dry Cleaning & Laundry Services Industry Growth
Recent Developments
Dec 14, 2024 - EPA Bans Two Dry Cleaning Chemicals
- Dry cleaners will have up to 10 years to comply with an announced Environmental Protection Agency (EPA) ban on the use of perchloroethylene, also known as PCE or perc, along with trichloroethylene (TCE), according to a report by American Dry Cleaner. Many US dry cleaning plants use Perc and TCE in dry cleaning operations. The EPA said perc and TCE have been identified as health hazards, with both linked to certain cancers. Dry cleaners with older, third-generation dry cleaning machines will have three years to change alternative solvents while cleaners with newer fourth-and-fifth generation equipment will have 10 years to transition. Dry cleaners have a longer timeline to comply than many other industries to come into compliance, per the report. The EPA first announced its intention to ban the two solvents in June 2023, followed by a period of public hearings. The report noted that states may accelerate the sunsetting process.
- Consumer confidence levels increased in November 2024, improving by 2.1 points from the previous month, according to The Conference Board. The Consumer Confidence Index was 111.7 in November 2024 from 109.6 in October 2024. Dana Peterson, chief economist at The Conference Board, noted that those remaining most confident on a six-month moving average basis confidence were those aged under 35 and those in the income category of over $100,000. Per Peterson, “Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years.” Purchasing plans for homes stalled and new cars rose slightly in November 2024 on a six-month average basis.
- Economic activity in the services sector expanded for the fourth consecutive month in October 2024, with only two sectors experiencing contraction, according to the Services ISM Report on Business. The Services PMI registered 56% in October, up 1.1 percentage points from September. Industries reporting a contraction in October were Other Services (including Dry-Cleaning & Laundry Services); and Management of Companies & Support Services. Fourteen of the 18 services industries reported growth in October including Retail Trade; Information; Transportation & Warehousing; Accommodation & Food Services; Finance & Insurance; Construction; Mining; Public Administration; Utilities; Real Estate, Rental & Leasing; Educational Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Wholesale Trade.
- The US dry cleaning and laundry services industry is projected to grow at a CAGR of 1.9% between 2024 and 2028, according to a forecast for the “Other Services Sector” from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy‘s anticipated growth. The report noted that consumer spending, along with expenditure by businesses, drives the other services sector. Consumer confidence is expected to improve in the forecast period, which bodes well for the various other services sector. While the COVID-19 pandemic resulted in remote working rates higher than pre-pandemic, some major corporations like Amazon are bringing their workers back to the office full time. According to the report, “Personal consumption spending for dry cleaning and laundry services may rise as more people return to traditional workplaces and seek a wider array of entertainment and recreational activities.“ Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest rate levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025.
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