By Becky Yerak
Chicago Tribune
WWR Article Summary (tl;dr) From small operators to the 36-store “CD One Price Cleaners”, dry cleaners are trying several new strategies to attract and retain clients. They’re marketing other services like cleaning rugs and other home goods and they’re looking for ways to make drop-off and pickup more convenient for consumers.
CHICAGO
Rafiq Karimi Jr. isn’t about to let anything or anyone get in the way of cleaning clothes.
Not consumers wearing lower-maintenance casual clothes to work. Not retailers selling inexpensive “disposable” fashions. Not telecommuters staying in their jammies. Not smoking bans lessening the need for trips to the cleaners. Certainly not garment-makers replacing silk, wool and other delicates with cotton and polyester blends that hold up to laundering in standard washing machines.
In Illinois alone, hundreds of dry cleaners have closed in the past two decades, but Karimi’s CD One Price Cleaners is among those trying to adapt in an industry that, despite a rebounding economy, is shrinking like wool in hot water.
To iron out their problems, dry cleaning businesses, from small operators to the 36-store CD One Price Cleaners, are trying several new strategies.
They’re marketing other services, like laundry for a wider array of clothing beyond the usual dress shirts, as well as cleaning rugs and other home goods, and they’re looking for ways to make drop-off and pickup more convenient and faster for consumers.
Some are touting environmental credentials, trying to operate more efficiently to pass savings onto customers and finding inspiration from strategies used in the restaurant and retail industries.
As if consumers’ changing habits weren’t challenging enough, the Illinois Senate recently floated the idea of slapping new taxes on services like dry cleaning, which could inflict more pain on an industry that’s already being taken to the cleaners.
Dry cleaning revenues nationwide are expected to drop from $9.1 billion this year to $8.7 billion in 2022, according to a recently published IBISWorld report titled “Machine Wash Only.” Revenues exceeded $10 billion as recently as 2008 and through most of the financial crisis were well over $9 billion.
“Dry cleaning has taken a hit over the last 20 years,” said Sue Kratz, executive director of Illinois Professional Drycleaners & Launderers. The number of dry cleaning establishments in Illinois is down more than 25 percent over two decades, U.S. Census data shows, although Kratz believes the decline has been closer to 50 percent.
Her members aren’t happy about the proposed tax. “Most dry cleaners feel as though it’s just another reason for people not to have their clothes professionally cleaned,” she said.
Other causes for a reduction in the ranks: Stringent environmental regulations have prompted some to exit the industry, and a solvent used by some operators has been considered a possible carcinogen. Immigrants who also started dry cleaning businesses are finding their children want to go into other professions, said Myong Kang, director of Korean operations for St. Louis-based NIE Insurance, which provides coverage to the dry cleaning industry. New Korean immigrants aren’t generally interested in getting into the dry cleaning business, either, she said.
Gus Bahr, a Chicago-area banker and father of three children ages 16, 15 and 12, said his wife has started working again, which has meant more trips to the dry cleaners with her clothes. He also takes his dress shirts and his teenage son’s button-down shirts to the cleaners after each wear.
But at his job, he no longer wears a suit for normal working meetings, instead going with a blazer with dark gray dress pants. “That’s a change I’ve made over the past 10 years or so,” he said.
To make up for lost revenues, at the upcoming Clean Show, an industry conference in Las Vegas, one topic on the agenda is potential partnerships between dry cleaners and laundromats.
The numbers of dry cleaners offering laundry services has gone up in recent years, and is expected to grow, said Mary Scalco, chief executive of the Maryland-based Drycleaning & Laundry Institute.
Last year, CD One Price began offering clean-and-fold laundry services at nearly all its Chicago-area stores after piloting it in Minnesota, and today it is considered a key growth area. It’s also begun offering alterations and is testing a pickup and delivery service.
“We could look at it as a negative that dry cleaning is going down, but the laundry business, which is far greater than dry cleaning ever was or ever will be, is what we’re getting ready for,” Karimi said.
On a recent morning at a 25-employee CD One Price store in suburban Chicago, a cash register rang up 281 sales between 7 and 10 a.m. for 967 pieces for dry cleaning, and 192 invoices and 796 pieces for laundry, all for same-day services.
Three ironing machines in the store can handle 200 shirts an hour. But to be able to continue to meet the 5 p.m. deadline for same-day pickup, the company needs to make an investment that will get that process up to 240 shirts an hour at busier stores.
CD One Price’s stores, most of which are franchised, have average annual revenues of $1.2 million a store. Revenues at stores open at least a year have been flat to up slightly, which is one reason why CD One Price is trying several innovations to stay relevant to consumers.
The company also keeps profiles on its customers and, when they visit a store, the cash register shows the cashier a range of stars assigned to that customer, from one to five, depending on how regular that customer is.
Each customer also receives an email after each transaction and is asked to rate the service on a scale of zero to 10.
“CD One Price has grown rapidly using the concept of one low price and high volume,” said Hal Horning, editor of trade publication National Clothesline. “CEO Rafiq Karimi thinks cleaners are shooting themselves in the foot by charging too much.”
CD One Price typically charges $3.29 a garment for dry cleaning and $1.79 for laundered shirts. Clean-and-fold laundry typically costs $1.29 a pound.
Smaller dry cleaning businesses are adapting, too, trying to react to both changes in the marketplace and to CD One Price’s growing footprint, which, since the start of the year, also includes a St. Louis suburb. But some are just folding.
Forrest Cleaners in Chicago neighborhood closed after about 50 years in business, and earlier this year it filed for bankruptcy.
“People pretty much have wash and wear these days, and don’t get those types of garments anymore” that need dry cleaning, said James Forrest, son of founder James Forrest Sr.
Places like CD One Price have also changed customers’ perceptions of how much they should be charged for dry cleaning, he said.
“Everybody has reacted to it,” said Ken Davis, owner of Kenny the Kleener, which has four stores in Chicago and the northern suburbs.
Drop-off laundry, a service he has provided from the start, is a “growing need” for customers, he said.
Davis also recently began spending a few thousand dollars a month to run commercials on cable television.
On Chicago’s South Side, family-owned TailoRite Cleaners, which has three locations, said it has been trying to recycle to help reduce costs, including encouraging customers to bring their wire hangers back to the store. It also hopes to make pickup and delivery a bigger part of its business to lessen its reliance on bricks-and-mortar stores.
Mike Bleier, who owns and operates both DriveCleaning, a pickup and delivery service, and a two-store chain called Greener Cleaner, has been promoting a mail-order service so environmentally conscious consumers can send him their laundry from as far away as Minnesota, Louisiana, New York, Florida and Colorado. Short-lived was a third store as well as an effort in which he put lockers in buildings. Bleier said instead he has been trying different services to appeal to building owners, including by setting up discount programs.
“A lot of cleaners are hanging on by a thread,” Bleier said.
