Overview of the European Dry Cleaning Industry in 2009

For small businesses, these are particularly difficult days. Undoubtedly, most retail laundry and dry cleaning businesses fall into this category.
Throughout Europe, some laundry and dry cleaning businesses are struggling, and some have even closed down. But overall, the situation for good laundry and dry cleaning businesses is not too bad. This mainly depends on the type of business and its location—not just which country the business is in, but also the specific region within that country.

Recently, I visited several dry cleaners in Paris. According to the owners of these dry cleaners, their sales remain stable. At one dry cleaner, I saw customers lined up inside the mall, each with several garments to be cleaned. But this is Paris, the fashion capital where people dress elegantly. Here, people wear a variety of clothing, which naturally benefits these dry cleaners. In northern France, which has been hit by industrial decline, or in more remote rural areas where dress is less formal, would the situation be the same as in central Paris? I think definitely not!
The fact is that the laundry and dry cleaning industry has been affected by an unprecedented global economic crisis. If we look back at 2010/2011 to assess these impacts, I believe we would find that the industry has indeed shrunk in scale, but efficiency may have improved. This conclusion is drawn from the significant changes that have occurred in the laundry and dry cleaning industry over the past 15 years.
Just by looking at the actual scale changes in the laundry and dry cleaning industry, you get an idea. The UK used to have about 6,500 laundry and dry cleaning units, commonly called "units." Among them were two large dry cleaning groups: Johnson Cleaners (with over 700 dry cleaners) and Sketchley (with over 450 dry cleaners), as well as several smaller groups including Munro Cleaners (with over 70 dry cleaners) and Brooks Cleaners (with over 70 dry cleaners), plus more than 4,500 independently operated laundry and dry cleaning shops. At that time, a new laundry group appeared, with over 100 dry cleaners directly owned and operated by Safeway supermarkets, later taken over by another supermarket, Morrison's. More notably, Sketchley and Brooks dry cleaning groups both went bankrupt and were taken over by Johnson Cleaners. Recently, Munro Cleaners also went bankrupt. Before this economic crisis, the latest data on the UK laundry and dry cleaning industry showed that there are currently about 4,500 dry cleaners in the UK, with Johnson Group's dry cleaners reduced to over 600, and independently operated dry cleaners down to about 3,500. Similar situations exist in other European countries. For example, at the beginning of the 1990s, Germany had more than 5,000 dry cleaners, but today there are only about 3,500. Italy used to have more than 30,000 dry cleaners, and now only about 15,000 remain.
Although the above data seems to indicate a continuous decline in the European laundry and dyeing industry, there is also an encouraging side. Since the early 1990s, the total cash sales of the European laundry and dyeing industry have been steadily increasing, and now its total turnover has exceeded 5 billion euros (over 7 billion US dollars), which has led to a continuous rise in turnover per dry cleaner and improved profitability.

The above statistics were collected and compiled by the European Textile Care Committee (CINET), an alliance organization jointly established by national textile care associations of EU member states. From these figures, we can see that the current turnover per dry cleaner in the UK is 133,000 euros, compared to less than 80,000 euros ten years ago. In the past, the turnover per dry cleaner in Italy was less than 35,000 euros. In most European countries, the situation of individual dry cleaners is similar. However, due to the impact of the economic crisis, the turnover of European dry cleaners may have declined last year, but the exact extent of the decline remains to be seen.
However, besides the survival of the fittest caused by too many dry cleaners competing for too little business, what other factors have caused this structural change in the laundry and dry cleaning industry? Undoubtedly, laws and regulations have a great impact. Regarding the regulatory impact on the dry cleaning industry, the European laundry and dyeing industry may be the most heavily regulated laundry and dyeing industry in the world. Regarding environmental regulations alone, the EU has successively enacted the following regulations:
♦ "Volatile Organic Compounds (VOC) Solvent Emissions Directive"
♦ "Existing Substances Regulation"
♦ "Classification and Labeling"
♦ "Registration, Evaluation, Authorization and Restriction of Chemicals" (REACH)
♦ "European Clean Air Program" (CAFE)
♦ "Water Framework Directive"
♦ "Soil Framework Proposal"
Here, I do not want to go into detail about these regulations, but I would like to mention the "Volatile Organic Compounds (VOC) Solvent Emissions Directive" again. Of course, this is not to introduce the changes this directive has brought to the European laundry and dry cleaning industry, as I have already explained this clearly at previous conferences. The reason for mentioning this directive here is mainly because, like all regulations, it needs to be reviewed every five years after implementation to see if it is working as intended and whether revisions are necessary due to changing external circumstances. In fact, this process started in 2008 and is now nearing completion, with the relevant results expected by the end of this year or early next year.
The lengthy report on the review results of this directive will cover the following content:
· Use, emissions, and environmental impact of solvents
· Solvents used
· Solvent quantities and emission levels
· Sealed distillation devices and drums
· Activated carbon filtration
· Major environmental and health issues
· VOC substitutes
· VOC-free systems
· Substance substitution (and related risks)
· Other VOC Emission Prevention Measures
Also includes a summary of VOC reduction measures:
· Examples of Good Practices
· Liquid Silicone Cleaning
· Liquid CO2 Cleaning
· Perchloroethylene Cleaning
· New Technologies Under Development
Among them, the more challenging parts are VOC substitutes and VOC-free systems, whose main goal is to propose alternatives to replace or reduce the use and emissions of VOCs. To put it simply, the aim is to phase out all VOC solvents in the laundry and dyeing industry. In Europe, these solvents include:
· Perchloroethylene
· Hydrocarbons
· Liquid Silicone
· Several other less commonly used solvents, such as DrySolv (a new type of dry cleaning solvent)
Currently, only the following two are still available for use:
· Liquid CO2
· Water
In the medium term, we will shift from using highly corrosive VOCs (e.g., perchloroethylene) to using less corrosive VOCs (e.g., hydrocarbons). At the same time, we will continue to seek suitable non-VOC solvents that meet all current performance standards of perchloroethylene. However, this may greatly restrict our business operations and lead to considerable costs despite limited profit margins. It is hoped that the ongoing audits will confirm that the current directive does not need to be amended at this stage.
The main solvent usage in each European dry cleaner in 2007 was as follows:

Based on the information we recently collected, we expect the following changes when we conduct the next survey in 2010:

* In the UK, whether this type of dry cleaning transition can be achieved mainly depends on the Johnson Dry Cleaning Group and all its dry cleaners using the "GreenEarth" solvent.
However, apart from Germany, which first adopted the "Volatile Organic Compounds (VOC) Solvent Emission Directive" in 1992 and subsequently triggered a large purchase of new machines, this regulation only began to affect most European countries in the early 21st century. As a result, many dry cleaners introduced new perchloroethylene machines with the latest environmental control technology and a minimum service life of 10 years. However, unless relevant regulations change, we do not expect significant changes before 2015.
However, some other changes affecting the EU laundry and dyeing industry have occurred so far, such as:
· Consumers tend to wear less formal clothing
· Increasingly washable garments
· Rising living standards
· Changing lifestyles/family members
· Growing demand for "convenience"
As a result, the business structure of dry cleaners has also changed. Many dry cleaners now offer only limited laundry services, especially shirt laundering. Some dry cleaners provide contract services for local enterprises and institutions, such as laundry services for small hotels (large hotels tend to prefer linen rental services). Some dry cleaners offer contract services through uniform-specific dry cleaning vouchers, while others provide contract services for formal wear rental companies. Additionally, customer demand for convenience has led supermarkets to increasingly offer dry cleaning services, while business on commercial street dry cleaners has declined, often due to local authorities banning vehicle access through commercial shopping centers. At the same time, to fully utilize all space in dry cleaners, many also engage in other retail activities, such as operating post office counters and key cutting.
Currently, other challenges faced by the European laundry and dyeing industry are also common. Due to generally declining sales, operating costs for dry cleaners seem to be rising, especially utility fees such as water, gas, and electricity. Therefore, dry cleaners now have to find ways to improve efficiency, more strictly supervise and utilize staff, and increasingly use automated equipment, even at the cost of extending delivery times, to ensure full capacity and more efficient finishing processes, thereby maximizing labor cost utilization. Several chain dry cleaners usually centralize the cleaning process in a larger central unit—similar to the concept of a planet and satellites. We have even found that some dry cleaners are tending to offer door-to-door pickup and delivery services—this is more common in North America but disappeared in Europe with the end of home laundry services in the early 1960s. This new service is not always direct door-to-door; sometimes it is combined with other dry cleaners to provide a local collection point on specific dates—not just at standard dry cleaners and agents, but often in large office buildings.
Similarly, the European laundry and dyeing industry is not the only sector viewed by the public as an environmental disaster and a last resort or "unwilling purchase" industry. Unfortunately, due to poor service and lack of skills, the European laundry and dyeing industry faces not only a lack of public recognition but also more criticism and resistance.
Since most dry cleaning machine processes in Europe are computer-controlled and automated, many procedures used by European dry cleaners no longer require professional skills. In Europe, we rarely see clip-on pressing machines anymore. Instead, most dry cleaners now use simplified finishing equipment, such as ironing boards and steam generators. At the same time, steam cabinets, tensioning devices, and pure chemical products have been replaced by stain removal kits. Nevertheless, the European laundry and dyeing industry is not merely a retail sector. It has now become a highly skilled industry requiring practitioners to have extensive and in-depth knowledge in many fields, including textiles, chemistry, business management, sales and marketing, customer relationship management, and a thorough understanding of numerous relevant regulations.
Although some European countries, represented by the UK, have made brave explorations, the number of people supporting practitioner training in the European laundry and dyeing industry remains very small. At the same time, many industry insiders have also pointed out that we are suffering from the harm of comfort: novices with less professional knowledge and who have actually not undergone any training can start or take over laundry and dyeing businesses, and the lack of professional knowledge and skills is not limited only to newcomers who have just entered the laundry and dyeing industry. Since relevant regulations seem to change daily, related technologies continuously develop, and clothing becomes increasingly complex, dry cleaning institutions need to constantly update their knowledge. Unless this issue is properly addressed, the laundry and dyeing industry will continue to bear enormous pressure. For example, the experience of the European dry cleaning industry is by no means limited to Europe, and European dry cleaners will continue to face some challenges unique to their local business areas, most of which are challenges that dry cleaners worldwide have to face. All dry cleaners are part of the global laundry and dyeing industry, which has quite a few commonalities: similar business types, equipped with similar machines and equipment, using the same solvents, washing the same clothes. The path to development lies not only in seeking survival but also in leveraging existing opportunities to jointly address the above challenges. This is precisely the preciousness of practices like today's information exchange through the IDC forum. Only in this way can we draw strength through collaboration and mutual learning to grow together!

International Drycleaners Association (IDC) Executive

Chris Tebbs

September 9, 2009