Spotlight on USA

Good signs to counter the gloom

1 January 2008



Despite the warnings of recession and lower consumer spending in the wake of the sub-prime market crisis, many laundry equipment suppliers remain upbeat about the USA market. Brian Collett discovers the reasons for the optimism


Fears that the American textile care markets will face a tough time in the next few years are being offset by positive signs.

Certainly gross domestic product grew robustly by an annual rate of 3.9% in the third quarter of 2007, despite the mortgage debacle, and the respected Economist thought the revised figure could be even higher.

However, growth was predicted to be short-term. The investment bank Goldman Sachs believes the sub-prime market crisis means lending in the United States could be cut by billions of dollars, leading to a recession of between one year and four years. The domino effect would be lower consumer spending, hardly alleviated by the advantages to exporters of a weak dollar.

If the worst happens, the country’s laundries and drycleaners may not be immune. Yet today’s gloomy forecasts may be off target, and some sectors always escape.

Important trends are emerging even though economic influences and counter-influences are confusing.

The hotel trade is finally picking up again after 2001 deterred thousands of business people from travelling. Dan Goldman, national sales manager of Wascomat, distributor for Electrolux products, says the USA has “awakened from 9/11” and is building hotels again, which is good news for laundry equipment manufacturers.

However, as the workload builds up so does the competition, and the winners are those that offer quality. Norbert Gitard, vice president of Jensen USA, says that ten years ago customers were mainly concerned mainly about getting a job done quickly but today the demand is for higher quality.

For Kannegiesser it’s a bonus, says Blaine Jackson, vice president of sales in the company’s American operation. “Quality demand is boosting business,” he reports.

The healthcare sector is also placing increasing orders. Mike Floyd, president of Continental Girbau, explains: “The baby boomers are getting older, and in ten to 15 years there will be even greater demand. New care homes are already being set up and these generally have a laundry.”

However the expansion of the care home sector could lead to centralisation. Rick Kelly, vice president of sales and marketing at Pellerin Milnor, predicts that homes will eventually form small groups to share or co-own a laundry off site.

A more obvious trigger for growth in the laundry sector is the large and increasing population.

Wascomat’s Goldman mentions particularly the huge numbers of Mexican people, who require goods and services wherever they settle.

More general developments are the growing preference for larger equipment and the rise of the on-premises laundry. John Olsen, ADC’s vice president for sales and marketing, says that the convenience and lower costs are probably the main arguments for an OPL. If you can manage your laundry efficiently it will pay off.

The accent is also on achieving greater productivity, cutting labour costs and saving energy and water. Dick LaMaina, president of Maytag says the continued reduction of water use, now required by law, has led to equipment being replaced.

More efficient use of water also reduces energy consumption.

Saving water

The movement towards saving water has come at an opportune time. Kimberly Underwood, vice president of Ecolab, says it has been welcomed in the states of Alabama, Georgia and the Carolinas, which have recently been hit by severe drought. She also recalls that new machinery installed in Tampa, Florida, cut water consumption by 80%.

The suppliers have benefited from sales of equipment and the states have been able to conserve more of their water.

Water conservation has influenced the hospitality industry in its choice of linen. As the hotel trade has grown, high thread count linen has been widely used, but Kelly at Pellerin Milnor now sees that trend slowing down because cotton sheets have a shorter life and need more washing. He says that hotels are trying to reduce replacement rates so they are going over to polyester-cotton blends.

Environmental awareness is in evidence at Milliken, the fabrics supplier. Heath Maughon, Milliken’s laundry service team leader, says: “Cotton bar towels take 35 to 40 minutes to dry. Those that are made with microfibre technology take between five and eight minutes. This means more can be processed in the same time. They won’t combust and they last four to five times as long.

“People today are interested in new ideas and new technologies, and they’re all interested in getting more revenue.”

The laundry business is directed more than ever by environmental considerations. Olsen at ADC says: “Everything will continue to go green and will continue on the energy conservation trend. I don’t think we have any choice. It’s almost a necessity.”

What is more, the trend is working for the manufacturers. It has resulted in a “very good year” for Milliken. It makes Goldman at Wascomat “very bullish about the future”. Floyd at Girbau is particularly enthusiastic: “We are having the best year we have ever had. It’s been dandy!”

ADC’s Olsen says the coin-op market is being hit by the banks’ reluctance to lend but the loss of some traders may be offset by the increasing size of others.

LaMaina at Maytag observes a general trend towards larger coin-ops and sees steady growth. The attractions of coin-ops for Americans are many, explains LaMaina. “Customers of a coin-op laundry can take their children with them and go shopping or go for a meal, They are convenient when both husband and wife are working.”

Jay McDonald, vice-president of product and brand management at Alliance Laundry Systems, says: “Indicators are there to support continued growth in the coin market – an increasing population living in rented accommodation over the next decade and time-strapped families.”

Replacement machines

There are fewer encouraging signs in the USA drycleaning market. The year 2007 was not a boom year, according to Marco Niccolini, export director of the Italian manufacturer Renzacci.

However, he emphasises that the American market is still important to his company because it is so big, and sales are being maintained because replacement machines using hydrocarbons and other alternative solvents are needed as perc is phased out.

Yet the market is shrinking because replacement costs are forcing small operators to close, says Darrin Haiges, executive vice president of EcoDry of America, an agent for Firbimatic.

He quotes the example of Illinois, where 100 stores have closed each year for the past two years. “But we are getting a resurgence of the larger businesses with multiple drycleaning stores,” he adds.

Other factors have conspired against the market. Economy-minded Americans are not using their drycleaners so often. “The average Joe is being squeezed a little,” says David Cotter, chief executive of the Textile Care Allied Trades Association.

Yet there are some hopeful signs for the market.

New apartment blocks are currently being built in many parts of the USA – for example, Manhattan has several dormitory developments for New York workers – and the occupants are all obvious potential customers.

Jamie Mayberry, vice-president of R R Street, the drycleaning chemicals company which has also developed the alternative Solvair system, highlights an even more interesting trend. “We are finally recovering from the casual dress trend,” he says.

“More formal wear is returning. More professionals are getting back into their suits and people going out for the night are dressing up again.”

An extra dimension has been added by the emergence of wetcleaning. Stuart Ilkowitz, president of Trevil of America, calls it “the most important thing going on in our business”.

Wetcleaning is certainly on the up, partly because many landlords will not let to companies using either perc or hydrocarbons. They fear that perc will seep into the ground and hydrocarbon is flammable, making wetcleaning an acceptable proposition.

The future of the whole textile care sector in the USA may depend upon the willingness of the lenders, and the extent to which the mortgage crisis and the weak dollar affect their decisions.

Even if a slowdown is just around the corner, some comfort is offered by Tom Medlin, USA sales manager for the Italian Realstar group:

“The American economy always comes back strong.”


Solvair Solvair
Signature table linen _ Milliken Signature table linen _ Milliken
Ecolab USA R&D Ecolab USA R&D
Jensen butterfly maximat Jensen butterfly maximat


Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.