Economics And Business Closings

It is difficult today to get away from all of the negative in the world. This is going to be a bit more of the same and how it has affected the drycleaning business and perhaps how it will affect us in the future.

Up until about 1998 our world was rolling along pretty well. A lot of people had a good work ethic and work was not just another four-letter word. It was about here that the slippage of ethics in big business and the loss of confidence in our own government by the way they had loosened the rules, or failed to see the big hole they could walk through in the financial segment of the economy which put the whole world at jeopardy due to big banks making very risky investments and deals. The economy was badly wounded as a result of their indiscretions. Then those governing us decided that the banks should not be responsible for their actions and decided to bail them out of the mess they put all of us in. Guess who paid for this huge amount of money being given to banks and other financial institutions?

Retirement accounts lost a lot of ground as the stock market began staggering and finally hitting what come to be known as a very deep recession. Then along comes the dastardly day of September 11, 2001 with the largest terrorism to ever visit the United States. The next event was us going to war with Iraq and this began draining the treasury in addition to bailing the “Big Banks” out because those in power didn’t want them to be inconvenienced due to their greed. This little war thing in the Middle East has been going on now for over twelve years. It would be impossible to find out exactly how much money has been spent, or borrowed to fund the war first on Iraq, then Afghanistan and the cost of chasing the bad guys all over the Middle East, and it is still bleeding our country.

Fortunately, it appears that there is a bit of light at the end of the tunnel of spending the money there, but the government continues to spend money like there is no end to it and of course, special earmarks and pet projects have an insatiable need for more and more money and a very inept government to dole it out.

In our own little industry the poundage is down almost consistently in all areas of the country due to a lot of factors such as easy care clothing and now the Levi Company recommends that you don’t wash their jeans, ever! Combine this with the economic challenges we have had for the past fourteen years with high unemployment and as companies lost business after 9-11 and had to lay off workers; automation surged and that laid off more workers, the inflation that has been thrown upon us due to companies raising prices because management didn’t know how much control the government was going to put on them and they wanted to ensure their prices were raised before controls might become effective. Drycleaners are way behind, simply because there is such an aversion to raising their prices and getting paid for the cost of them doing business.

As a result of all of the above, and more, business has been down because there is simply not enough clothing going to the drycleaners for servicing. We have had too many drycleaners in the past years because it is an easy business to get into. Many owners look at it simply as a cash business and they want to take as much cash as they can and not pay taxes on their incomes. Others who have bought a drycleaning business or acquired a drycleaning plant through family or friends wanting to get out of the business have not all been good business people and therefore have made some bad decisions regarding their businesses. Now we have some really ratty looking drycleaning plants, many have ancient equipment that is grossly outdated and have seen no improvements since they were put in.

Just recently, a onetime large drycleaners filed for bankruptcy in a major city and had debts of 3.1 million dollars and assets of 1.6 million dollars. Another filing for the company listed assets of $50,000. They owed one of the larger supply companies $375,000 which was hard for the supply company to swallow and will definitely have an affect on their own financial health. The cleaners that filed for bankruptcy stated they had lost $639,000 in eleven months of 2014. The company was established in 1895. There are a couple of things that can be learned here and one is that bad management can kill a company regardless of how long they have been around and also that bigger isn’t always better.

Cleaners have been going out of business for several years for various reasons and this has had, and will continue to have, a disastrous effect on all equipment and supply companies and many peripheral businesses such as marketing, and management companies and specialty vendors.

The handwriting is not only on the wall of where this industry is going but it is chiseled very deeply into the wall. Can it be reversed? The outlook is not all that bright when garment people are looking into nanotechnology to provide no stain clothing, permanent press clothing, odor eaters, the garment manufacturers and sellers are promoting not only dress-down Fridays but dress-down everyday, including the special days such as Sundays, funerals, job hunting, etc. It appears we have gone from a well dressed nation to a bunch of sloppy dressers with hats on backwards, pants worn at half staff, Crocks and some really funky outfits that would be right at home at some alien convention.

The only thing I see that will help some of the cleaners is to get very, very good at what you do and how you present it, price it for a profit and always be on the lookout for new customers and what new services you can offer. There will be many more cleaners going out of business and this is a good time to begin looking for slightly used equipment and ways to bring some automation into your business the same way that virtually every other segment of industry has done.

As a personal aside, my website was hacked (or something) several months ago and I just got it back up and running a few weeks ago. I would like to invite all readers to do a Google search for it then browse and look around and you will probably find something the that can help your profitability or productivity. There are a lot of solutions to problems and good information for the drycleaner. Before the site went down it was always at the top of the list when being searched. Unfortunately, it is down about six or eight listings. A lot of hits will bring it back to the top when a search is done, and it will be back where it belongs!