CHICAGO — As we come to the end of another year, where do you see your coin laundry operation? Is it better? Worse? About the same?
While anchored in a public service that is decades in the making, the coin laundry industry still is subject to influences both internal and external. While the basics of self-service laundry operations are largely unchanged, there are other factors at play when it comes to building your business.
American Coin-Op invited representatives from several manufacturers and distributors, as well as a top coin laundry association executive, to size up the industry today compared to five years ago, to identify opportunities for stores to improve, and to establish the manufacturer’s, distributor’s and store owner’s roles in pushing this industry forward.
Seated at our virtual roundtable were:
- Chris Brick, regional sales manager, Maytag Commercial Laundry
- Jason Fleck, regional sales manager, Huebsch
- Gary Gauthier, national sales manager for vended laundries, Milnor
- John Kelly, regional sales manager, Speed Queen
- John Olsen, vice president of vended products, Laundrylux
- Tony Regan, senior vice president, global sales, ADC
- Brian Wallace, president/CEO, Coin Laundry Association
Before one can discuss making improvements, one needs a starting point. So, American Coin-Op asked the group about the state of the coin laundry industry today compared to five years ago. Virtually all of them agree that the industry has bounced back from the 2007-2009 Great Recession in a significant way.
“While none of us wish to go through that tough economy again, it did prove to most laundry owners the resiliency of the self-service laundry business,” says Wallace, who sees many CLA members expanding now after managing to hold their own during the Recession. “This is manifest in many store re-equipping projects, building of new stores and smart acquisition of existing laundries. I feel that the collective quality of both today’s laundries and their owners are better than five years ago.”
Brick says today’s coin laundry industry is continuing to flourish, thanks in part to a better financing environment.
“After the market crashed and lenders increased borrowing requirements in 2009, it was a difficult time for a potential owner to obtain a favorable loan,” he says. “As the market has continued to show improvements, lenders are lessening their stringent borrowing requirements and potential borrowers in 2013 have much better luck than those just a few years ago.”
Technology has made strides, too, and energy- and water-efficient equipment offers owners a chance to save on utility bills and bolster their bottom line, Brick adds.
Gauthier believes the industry is “probably stronger and smarter” than five years ago. “The last five years have been watershed times for our industry. We’ve seen a deep economic crisis that resulted in a meltdown of the lending markets and ex-migration of market customers in many parts of the country. Despite these things, many indicators show that our industry has rebounded to pre-2008 business levels.”
“The improved economy and record low interest rates have brought new investors into the coin laundry business,” says Olsen. “Some highlights for us included high-spin Electrolux stores opening up across the country … and our success with Crossover machines replacing inefficient top loaders.”
“We’ve experienced something of a rubber band effect,” Fleck says of the Southeast market, where store owners and investors were wary of doing anything until the dust from the financial and housing collapses had settled. “People couldn’t put off reinvesting any longer, and the elements which make our industry successful are all coming back together at the same time, which is creating a boom.”
Regan says that while the industry has not made a complete recovery, it is seeing a “resurgence of new coin laundry projects as well as an increasing replacement equipment market.”
“Although the industry is fairly recession-resistant, there was still an impact on profitability when the economy was down,” says Kelly. “Good operators who maintained their stores and continued to reinvest in their businesses are being rewarded for that today. Consumers are hesitant to buy houses and the number of renters in America is at an all-time high and growing. As a large portion of our customer base is renters, this trend is a good sign for the industry moving forward.”
Check back Monday for Part 2!