Linen Supply 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 530 linen supply services companies in the US provide laundered items, such as table and bed linens; towels; diapers; and uniforms, gowns, or coats, on a rental or contract basis. Companies provide linen products and deliver cleaned and processed linens as replacements for soiled linens. Large firms may offer related products and services, such as washroom supplies or janitorial services. Firms may also process customer-owned linens. Large firms may manage on-premise laundries for customers or free-standing laundry cooperatives.

Capital-Intensive Operations

Industrial laundries are capital intensive, and the ongoing maintenance of machinery can be significant.

Government Regulation and Certifications

Linen supply service providers and industrial laundries are especially vulnerable to regulations that conserve water and protect the environment.

Industry size & Structure

The average linen supply service provider employs about 100 workers and generates $7-8 million annually.

    • The linen supply service industry consists of about 530 firms that employ 51,000 workers and generate $4 billion annually.
    • The industry is concentrated; the top 50 companies account for about 72% of industry revenue.
    • Large firms typically offer both uniform and linen supply and include Cintas, Aramark, and Alsco.
    • Large firms with a focus on healthcare linen supply include Crothall Laundry, Ecotex Healthcare, and Mission Linen Supply. Several large firms in this sector are family-owned.
    • Small firms typically operate within a limited geographical market.
                                  Industry Forecast
                                  Linen Supply Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 15, 2024 - Prices Up in December
                                  • As measured by the US Bureau of Labor Statistics' Consumer Price Index (CPI), laundry and dry cleaning services prices grew slightly month over month in December 2023 and about 5% year over year. Overall inflation increased 0.3% month over month in December 2023, seasonally adjusted, and 3.4% year over year before seasonal adjustment. The CPI measures the monthly change in prices paid by US consumers for goods and services. The year-over-year increase remains well above the Federal Reserve's 2% target for a healthy inflation level. The core CPI, which excludes volatile energy and food prices, increased 0.3% month over month and 3.9% year over year. The energy index rose 0.4% month over month and fell 2% year over year. Food prices grew slightly month over month and were up 2.7% from a year earlier.
                                  • Linen supply companies will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                                  • Lower consumer spending and inflation are expected to limit growth in the US linen supply companies industry, which is projected to decline at an over 1% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The slowdown follows industry fluctuation during the pandemic in 2020 (-9%), 2021 (7.6%), and 2022 (5.5%). According to the sector forecast, “Personal consumption spending for dry cleaning and laundry services should rise as people increasingly return to traditional workplaces and seek a wider array of entertainment and recreational activities.”
                                  • Consumer confidence levels rose in December 2023 for the second month in a row, following three consecutive months of declines, according to data from The Conference Board. The Conference Board’s consumer confidence index increased to 110.7 in December 2023 from 101 in November 2023. According to Dana Peterson, Chief Economist at The Conference Board, “December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.” Peterson added that the gains in consumer confidence were largest in householders aged 35-54 and households with income levels of $125,000 and above. Plans to purchase homes, autos, and large appliances rose moderately on a month-to-month basis as interest rates moderated.
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