Is The Dry Cleaning Business Becoming Obsolete?

I’ve been thinking about dry cleaning a lot. Or more precisely, how to avoid it. And then on Thanksgiving on my way across town, I saw (for the first time ever) this sign which made me realize I’m not the only one cutting way back on my dry cleaning. And while I hate to see a small business face such an existential threat, dry cleaning is clearly facing an uncertain future.

What’s going on?

The rise of fast fashion and athleisure means that dry cleaning a garment can equal or surpass the cost of replacing it.

I became very conscious of my dry cleaning bills relative to the cost of the items being cleaned a few years ago after I started buying my wardrobe at COS. It dawned on me that a $100 item dry cleaned weekly would quickly cost more to maintain than the item cost in the first place. I set about trying to buy more items that were washable (and now I’ve invested in a steamer so we’ll see if that reduces the need for dry cleaning even further).

Scroll down for more on what’s disrupting dry cleaning
Casualization: at work and play

It’s very rare for people to wear suits or other dressy attire to work. Fifty percent of all dry cleaning/laundry services is now for jeans (either washing or dry cleaning). Button-down shirts, suits, and dresses are becoming a relic of the past.

And most companies, even banks, and lawyers have implemented a more casual dress code.

Aside from work, all dress-up occasions, e.g., church, clubbing, travel, even weddings, have become more casual.

Rental apartments come with washer/dryers

Having an in-unit washer/dryer has become a top amenity for rental apartments. And if not in-unit, one laundry room per floor is very desirable. Additionally, sweaters, even cashmere ones can now be cleaned using an in-home washing machine.

Rental economy

I’m not sure how big of an impact companies like Rent The Runway are having on consumers or the dry cleaning biz. But as the apparel rental business grows, those companies will be doing their own dry cleaning or looking for bulk cleaning which is not profitable for independent dry cleaners.

dry cleaning/laundry startups: the ubers of cleaning

Drycleaning apps like FlyCleaners and Cleanly set about disrupting the drycleaning business as we know it by making it easy to arrange for your dry cleaning to be picked up and delivered through the app. Millennials loved the concept. However, these new app services didn’t know the first thing about drycleaning and most of them went bust. But in the meantime, with the help of all that VC money, they were able to undercut the prices that independent dry cleaners were charging.

Between less business overall and a preference among younger consumers for app-based businesses, it has been tough for family-run dry cleaning businesses to stave off the competition.

“They just want to be the Uber of everything. But you can’t mass-produce service, especially with cleaning. There’s no standardized thing you can just put on a production line and do it, you know. All clothes [are] not created equal.”

Boomers Retiring

As more boomers retire (10,000 a day are turning 65), even the most conservative dressers are going for a more casual look and will need fewer dressier outfits. Again, less need for dry cleaning.

And finally, Some fascinating tidbits about the recent history of dry cleaning and immigration

I did not know that dry cleaning has been a Korean-dominated business (at least in NYC) from the late ’70s through the ’90s when immigration was at its peak from Korea.

Many of those newcomers did not speak English and gravitated to low skill jobs available at clothing companies where they learned to sew with many then starting their own clothing businesses, e.g., Forever 21 was founded by a couple from South Korea in 1984.

Many of the workers were undocumented, however, and ran afoul of immigration.

That led some to quit the clothing biz and shift to the more under-the-radar dry cleaning biz. And they took their sewing skills with them which is why so many dry cleaners provide tailoring services!

The majority of the dry cleaning stores in NYC were bought from Jewish and Italian-American owners.

Now as these Korean owners are reaching retirement age and their children are well-educated, they are selling to Chinese immigrants.

However, there has been a significant decline in the number of dry cleaning businesses in NYC and the outlook for growth is slim to none.

  • As of 2016, there were an estimated 3,000 dry cleaners in NY State, with 80% of them Korean-owned.
  • 900 Korean-American dry cleaners have closed in the past five years.
Bottom Line.

Dry cleaning RIP.

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