We traded formal wear for yoga pants during the pandemic; dry cleaners struggle | Economic news
For more than a century, dry cleaning has been no stranger to upheaval – world wars, financial collapse, polyester – but the coronavirus pandemic has proven to be a multifaceted threat.
There was the initial shutdown of most retail businesses and services when the pandemic began in the spring of 2020, followed by months of meager income as their core clientele of office workers swapped dresses, suits and collared shirts for T-shirts and yoga pants. Add to that the cancellation of carnival balls, traditional weddings and other high-end social events, and the past year and a half has been a struggle for the survival of many family businesses in the New Orleans area. .
“I lost a lot of money, I can tell you that,” said Quong Lee, third generation owner of Q. Lee Laundry & Cleaners in TremÃ©.
Like many local business owners, Lee continued to pay his employees throughout the summer of 2020, despite being either closed, or open, and then three days a week.
âIt was absolutely horrible,â said Lee, estimating that his store had lost 75% of its business in the first 12 months of the pandemic.
âWe were just standing doing nothingâ¦ just looking at each other. He was just sitting here waiting for no one to come in.
âNew Orleans is so unique because we have this grain. But it is wearing out right now.
John Walter, owner of Liberto cleaners Uptown location, recalls a similar experience. Its activity fell by 80%, before recovering enough to end 2020 in halving. It’s still down about a quarter this year.
âNo one had a reason to wear anything other than athletic shorts or athletic clothes,â he said.
And while the return of some workers to their offices this year offered a glimmer of hope, it was hardly business as usual. Schools have sent many students home for COVID-19 quarantines this fall, making it difficult for parents to get back to work. Then came Hurricane Ida, accompanied by labor shortages and skyrocketing material costs wreaking havoc behind the counter.
âThings have picked up,â said Lee, who believes the slight uptick started around Easter. “But is that where I would like him to be?” No.”
Walter said some dry cleaners have closed, although it is difficult to determine how many have gone missing or if this was caused directly by the pandemic.
Measure the toll
The Institute of dry cleaning and laundry, a national trade group, recently wrote that it expects the loss of about 30% of the industry “at the end of the day, what we think (frankly) is still a year away.”
That’s an important caveat, said Mike Adler, owner of Laundry and dry cleaning AJ at Chalmette and Universal Equipment and Machinery at Metairie.
Universal Equipment maintains and installs machines in some sixty cleaning and laundry centers in Louisiana. Adler said he had not seen a sharp drop in customer numbers due to customer bankruptcy. But the initial financial shock and continued pressure from the pandemic could bankrupt many people over the next few years, when the time comes to replace or repair expensive machines and homeowners decide to throw their cards away.
Either that, or they just burn out from all the extra work and take early retirement.
âYou’re going to see this happen in two years – not now,â he said. âThat’s when you’re going to see a lot of them drop. They will not be able to reinvest and they will be bankrupted.
Adler said he had to rebuild his business after Hurricane Katrina in 2005. He was 42 at the time. “Would I do it [now] at 58? I do not know.
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Claude Foreman, who spent more than 50 years at the company before selling One Cleaners a decade ago, considered returning during the pandemic. when the family that bought their business got into trouble.
âEveryone I spoke to said, ‘Claude, don’t do it,’ said Foreman, who is 78 years old. âEveryone was just saying how hard it is to come up with a decent margin. “
Walter largely attributes Liberto’s survival to being a third-generation debt-free company, although he and his family are still working crazy hours.
âPeople approaching retirement age find it difficult to sell their businesses and they are in burnout,â he said. âThey can no longer work 70, 80 hours a week.
Input costs rise
The cost of supplies is also up 30% to 100%, according to the article, and supply chain disruptions have made it difficult to purchase products such as hangers and stain removers. Then there is the cost of utilities – water, natural gas, electricity – which have exploded.
âOverall, everything has increased,â Walter said.
Lee, Walter and Adler said their stores have struggled to find employees since sales started to pick up a bit, despite their wages rising.
âWe just can’t get someone back to work,â he said, adding that he was spending the equivalent of his entire annual advertising budget on help ads.
âI have not received anyone from an employment office and I use three employment offices,â he said.
Walter had 36 employees at Uptown Liberto. He now has 14 but could use five more.
He typically paid $ 8 to $ 10 an hour “but can’t hire at $ 14”.
âBasically, if a person doesn’t have bills to pay, they don’t come back to work,â he said.
Rising input costs ultimately trickle down to the consumer, who already faces reduced operating hours or longer lead times.
âIn order for us to survive and keep paying people, we have to raise prices,â Lee said. “And people say, ‘Hey, you all went up.’ But that’s not what we wanted; we must.”
Adler thinks some discount cleaners that operate on tight margins could be squeezed out. He sees a future in which businesses left behind must adapt to capture business.
âI think we’re going to have to adapt to what we have now,â he said. “It won’t necessarily be less; it’s going to be different.
Walter and Lee, however, believe the effect of the pandemic will be much deeper.
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Changes in the clothing habits of Americans have been a constant factor for dry cleaners. Lee remembers his father lamenting the rise of polyester in the 1970s, which was seen by many in the dry cleaning industry as a disturbing consumer trend.
He and Walter say the effect of the pandemic on white-collar office work that has historically driven many dry cleaning activities will be permanent as businesses shrink office space and more people work at home and use teleconferencing software instead of meeting in person.
âIt will never come back to where it was,â Walter said.
Lee said it has already become harder and harder to make money as people have started to dress more casually, and the pandemic just seems to have given this trend a boost. .
âCOVID has really turned everything upside down, and I don’t know how it’s going to turn out,â he said. “I don’t know what to think or what’s going to happen.”