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 16,000 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 $400,000 in annual revenue.

    • The US has about 16,000 firms with about $6.5 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
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Apr 9, 2024 - Slower Growth Forecast
                            • The US dry cleaning industry is projected to grow at a CAGR of nearly 2% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The anticipated growth rate of 1.6% is slower than the overall economy's projected growth. The report noted that consumer confidence levels have improved, which bodes well for the various other services industries, which includes dry cleaning. Additionally, consumer sentiment has seen a degree of improvement following sustained lower levels. The recent rise in remote work has also impacted the dry cleaning and laundry services industry. The forecast notes that 30% of employees worked remotely in 2023, compared to less than 10% before the pandemic. Per 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.”
                            • Consumer confidence levels were essentially unchanged in March 2024, after a dip in February 2024 following three consecutive months of growth, according to data from The Conference Board. The Conference Board’s consumer confidence index was 104.7 in March 2024 from 104.8 in February 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future.” Peterson added that confidence rose among householders 55 and over but fell for those under 55. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                            • Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
                            • Nearly 20% of office space in major US cities was not leased as of Q4 2023, with the continuing popularity of remote work and a long-standing oversupply contributing to higher vacancy rates, according to Moody’s Analytics data in the Wall Street Journal. The 19.6% vacancy in the fourth quarter of 2023 was slightly higher than the 18.8% a year ago and is the highest vacancy rate since 1979. The top three US cities with the highest office vacancy rates in Q4 were all in Texas: Houston, Dallas, and Austin. Some industry analysts think the higher vacancy rate could linger due to the continuing popularity of working from home. Demand for dry cleaning services may increase as more workers return to the office.
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