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 17,600 dry cleaning firms 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 (percholoroethylene) 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 is independently owned, has about 5 employees, and generates $462,000 in annual revenue. It has over $100,000 worth of equipment, and spends around $7,000 a year on advertising.
- The US has about 17,600 firms with about $8 billion in annual revenue.
- 81% of firms have fewer than 10 employees.
- Companies may operate as franchisees of national chains.
- Segments include cleaning services for individuals and businesses, reselling, and alterations.
- Large companies include DryClean USA, Zoots, PWS Laundry, and Martinizing Dry Cleaners.
Industry Forecast
Dry Cleaning & Laundry Services Industry Growth
Recent Developments
Nov 22, 2022 - Most Laundry Operators Optimistic About 2023
- Most laundry and linen service operators have a positive outlook for 2023, according to the most recent American Laundry News – Your Views survey released in November. When asked about the prospects for their laundry operation in 2023, 50% of respondents replied with “Good,” and 9.1% said “Excellent.” Just over 30% had a “Neutral” outlook, and 9.1% replied with “Not good.” More than 26% of those surveyed said their top priority in 2023 was retaining and improving staffing; a similar percentage said their top goal for 2023 was to maintain their current level of business. More than 17% said they hoped to increase business next year. Nearly 48% of those surveyed listed inflation and rising costs as the issue that will most affect the industry in 2023, while 30.4% said that labor would be the main issue next year.
- Dry cleaners hoping for an uptick in business may need to wait longer as office occupancy remains stubbornly low even as pandemic conditions have improved. Some real estate developers are holding off on new office projects as remote work has eroded demand for new office space, and rising interest rates make projects more expensive, according to The Wall Street Journal. Office occupancy is only about half of what it was before the pandemic, which has prompted some major real estate firms, including Varnado Realty Trust; Hines, Kilroy Realty Corp.; and Brookfield Asset Management, to tap the breaks on new office development projects. The national office vacancy rate is 12.5%, up from 9.6% in 2019, according to commercial real estate data firm CoStar
- The pandemic contributed to a reduction in the nationwide number of dry-cleaning establishments as more people worked from home and dressed more casually. The number of establishments classified by the US Bureau of Labor Statistics (BLS) as “dry-cleaning and laundry services, except coin-operated,” fell 12% from 18,756 in Q4 2019 to 16,497 in Q2 2022. However, the pandemic seems only to have accelerated a trend that was underway well before the health crisis began. Between the first quarter of 2001 and the fourth quarter of 2019, the number of “dry-cleaning and laundry services, except coin-operated,” declined by 31%, according to the BLS. According to Bloomberg, the dry-cleaning industry has also been challenged by EPA crackdowns on emissions. Additionally, as mom-and-pop dry-cleaning owners retire, their children often opt not to continue in the family business.
- Laundry industry experts are preparing for the possibility of more stringent federal and state regulations of a family of “forever chemicals” associated with various health issues. Per- and polyfluorinated substances (PFAS) don’t break down in nature, are “bioaccumulative” in the human body, and are associated with cancer, thyroid problems, and fertility issues. PFAS chemicals are found in several products, including water- and stain-resistant garments. When such garments are laundered, PFAS can wind up in wastewater and, eventually, drinking water. In late 2021, the EPA released a roadmap outlining steps to reduce emissions of PFAS. To comply with a potential tightening of PFAS regulations, laundries may have to invest as much as $5 million in new filtration technologies, according to EEC Environmental, a wastewater compliance consulting firm.
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