How do laundry owners manage their laundries

Corona hits laundries: The cleanliness business is threatened with extinction

If Daniel Moniri had to describe his situation, he first thinks of a western comparison: “The only thing missing is a steppe runner rolling through the otherwise empty desert.” The corona crisis in downtown Düsseldorf was already in a similarly extinct state at the first lockdown moved in March. He was already lying “on the floor”, says the man in his mid-forties with his hair gelled to one side and the checked suit. After the first easing in May, things then picked up again. Office workers brought business clothing, and cleaned upper class clothing was also in demand at home. And the hotels also sent their guests' clothes over again.

But now the business has almost completely collapsed again. Out of 20 hotels that are normally Moniri's customers, 17 are closed. The remaining three take just a tenth of the normal amount to wash. Even private customers, who normally bring shirts and suits, blouses and costumes, only stopped by sparingly. Instead of cleaning 600 shirts, he now only cleans half of them on good days. "For me, it's really threatening my very existence," says Moniri.

Like him, most of the almost 4800 dry cleaners and laundries in Germany are doing. Although they ensure that textiles are hygienically clean, a large part of their business is lost to them. In the first half of 2020, the turnover of companies that wash primarily for hotel, restaurant and catering customers collapsed by 90 percent. And after the brief recovery in summer, things are now looking bad again. The German Textile Cleaning Association (DTV) is currently expecting a 95 percent decline in sales for these specialty laundries. For dry cleaners who mainly wash clothes for private customers, the DTV forecasts a minus of 80 percent. Even companies that wash laundry from hospitals and nursing homes or work clothing from industry and trade are likely to earn between ten and 30 percent less than last year.

The dress code in offices has been changing for a long time. Now there is also the home office. That hits men's outfitters hard.

A wave of bankruptcies threatens - with far-reaching consequences: More than 90 percent of hospitals and two thirds of nursing homes are dependent on external service providers. Even very few hotels still wash themselves. And the food industry, car manufacturers, energy suppliers and fire brigades also urgently need the cleaners.

On a Thursday morning in Düsseldorf, the eight small and three large washing machines in Vassilios Konstantinidi's laundry are running hot. It smells like fresh laundry and is extremely warm, the humidity is high. Two of the total of seven employees are at the ironer, a kind of giant iron that smooths even large fabrics perfectly. One employee dampens the textiles before ironing, another folds the finished fabrics and packs them into finished packages for the customers. In the back room, everything happens on a smaller scale: an employee irons shirts and small items of clothing by hand with a steam iron.

“Actually, two people would iron here, but we just don't have enough to do,” says Konstantinidis. Anyone who wants to watch the laundries at work currently has to come early: Konstantinidis has sent his employees on short-time work, ironing is only done until 12 p.m., and if things go well, they have to do the shortage until 3 p.m. However, the laundry manager has not shortened the opening times. And so he sits alone in his shop until 6 p.m. every afternoon, waiting for the customers who don't come.

His laundry supplies a few guest houses, a handful of restaurants and a few ships that chug on the Rhine from Düsseldorf to Cologne in normal times full of tourists. Business with private customers makes up half of his turnover: They bring over bed linen, blankets and pillows, and sometimes shirts. But business attire is not Konstantinidi's bread-and-butter business. “Luckily,” laughs the Greek. Formal clothing is rarely worn in the home office.

"Almost all business clothes are missing," confirms Andreas Pützer from DTV. “Without events and celebrations, there is no turnover in evening, wedding or festive clothing.” But suits, shirts, blouses and costumes are the core business of many dry cleaners and often make up well over half of turnover. “The business shirts alone represent 40 percent of sales on average,” says Pützer.

Konstantinidis estimates that he made 30 percent less sales in November, "it was still good that we were able to work off the old stock from the hotels and restaurants." In December it will look much worse when hotels and restaurants continue to close are. And the Christmas business should also be canceled this year.

He could hold out until summer, says Konstantinidis. But if the situation does not improve by then, he can close his shop. He had to close his second location in Cologne at the end of May. "Without private business and without the money from the government's first aid, we would have been bankrupt long ago." This time, however, Konstantinidis cannot hope for support from the federal government, because that only exists if at least 80 percent of sales are made through business with hotels and restaurants become. The fact that less laundry is left for the laundries during lockdown times is not taken into account.

Compared to colleagues who are completely specialized in the hotel industry, Konstantinidis got through the crisis relatively lightly with 30 percent less sales in November. Rolf Slickers, for example, is even more affected. He is the managing director of Servitex, a service provider that negotiates framework agreements with hotel chains for seven owner-managed laundries with a total of 13 dry cleaners in Germany. At its partner laundries, the drop in sales is currently between 75 and 90 percent. Hotel linen? Nothing. Slickers estimates that of the 400 tons of laundry that his laundries normally clean every day, only 40 to 80 tons are left.

Your business model is rental linen, a common procedure in the industry with large hotel customers with 40 or more rooms. The large dry cleaners not only wash for them, they also buy their textiles: sheets, pillowcases, towels and table runners. Everything according to the specifications of the hotels and in multiple versions, if desired also embroidered with the hotel name.

The corona crisis is therefore a double catastrophe for laundries. Because the loans for the fabrics still have to be paid off, even if the hotels no longer bring them to the wash - according to Slickers, the costs for a hotel alone are a good 50,000 euros. After all, Slickers laundries are now placing their hopes on the announced November aid from the federal government. According to the DTV figures, more than half of the laundries would not survive more than twelve weeks without support. Despite everything, Slickers expects a long dry spell: only when an effective vaccine is available can things slowly start to improve again. He does not believe that business will normalize before 2023.

More on the subject: The current Corona travel restrictions are affecting hoteliers more and more. Sales have slumped by almost 90 percent.

© Handelsblatt GmbH - All rights reserved. Acquire usage rights?