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Anonymous

{audio:0:00:13} When did you first open a DryClean USA store?

{audio:0:00:19} How many stores did you buy?

{audio:0:00:24} Myself and my two brothers-in-law purchased 28 stores and they were owned by a company called DCI Management.

{audio:0:00:35} How much did you pay for the stores?

{audio:0:00:38} We paid over $2.5 million.

{audio:0:00:42} You were running the stores?

{audio:0:00:44} The stores were run by the employees, but we had a central location where we had our equipment and we had over 170 people there, running the operations.

{audio:0:00:59} Whereabouts were the stores?

{audio:0:01:01} Near downtown Nashville. It used to be a bread factory and they went out of business and someone set up all the equipment there and that was our main hub. We had four vans that would run around from 5:30 in the morning until close to 5:30 in the afternoon, when they would go and pick up for the next day and they delivered the ones that were done for the day.

{audio:0:01:28} What was the revenue from the 28 stores, roughly?

{audio:0:01:33} There were quite a few stores but they all varied. Some stores did anywhere from $250 to $400 and some of the better stores did $750 to $1,000 a day.

{audio:0:01:53} Who were the main customers?

{audio:0:01:55} The neighborhood, obviously, provided all the customers but we had stores with different levels of income in the neighborhood. Also, even if it wasn’t in a very good income neighborhood, you had a lot of traffic that would go through. Some neighborhoods are more residential; some are more commercial businesses. In early 2001, people still dressed up, before the fabrics were changed by the fashion industry. For example, men would dress with button-down shirts and a sports coat. But as the years progressed, they became more casual; they still wore the button-down shirts and slacks but after 2008, 2009, after the financial collapse, people started dressing up less and less. No more suits, necessarily. Some people still wore suits but more and more businesses started going to casual which meant that, instead of button-down shirts, they changed to polo shirts. Instead of Friday casual, it started slowly creeping into everyday casual.

{audio:0:03:31} So that reduced the demand for your shops and laundry?

{audio:0:03:35} Right; but when you are in a professional environment, even if you are casual, they will tend to wear clothes that were more presentable and pressed. You can’t press those shirts yourself. Well, you can press it, but it won’t look and feel the same as when it’s professionally done. We have better equipment to treat and work the fabric. I know fashion changes but you want to wear your fashion the way it was when you bought it. Even though you’ve worn it over and over, you want that fabric to feel and look as if you just bought it. You’re not going to get that unless you get somebody professional, with the right equipment, producing that kind of look.

{audio:0:04:32} What was the split in revenue between those residential customers and commercial customers, for your stores?

{audio:0:04:42} Because of the commercial environment, we used to have quite a bit of business. It depends on the type of environment you were in. If you are in an area where, for example, the household income is over $100,000 obviously you are going to spend more money on nicer clothes and you want to look more presentable. Out of all those 28 stores, we were literally stretched out to two different counties. What’s the split? Obviously, if you are a blue-collar worker, you’re probably not going to wear cleaned and pressed clothes as much; maybe only on special occasions. Luckily, a lot of our stores were in an area where people frequently used our services.

{audio:0:05:37} Were all of your customers individuals? Were there any companies that were using your stores?

{audio:0:05:44} On one occasion, we had an account with the hotels nearby that had guests and we would go and pick up a bundle for them and we would bring it back within the same day. Also, Dollar General was right down the street from one of my stores and it was a headquarters, with a lot of business people in and out. Even though they tended to wear a lot of casual clothes, unless they had meetings and things, we actually set up a small closet area, which was a pick-up station just for their employees. We gave them bags and ID numbers and a free membership deal, with savings. They would literally take those bags, fill them off and drop it off in that location near the lobby. We would drive by and pick up what was there and drop it back.

{audio:0:06:52} We got them to sign up for a free membership. DCI Management used to charge for members, so that members could have free pick-up and delivery and a discount. But when we took over, we just gave everybody discounts and membership was free. They remembered that they had to pay for it before and that now they didn’t have to pay for it and they still got the same service, so they were happy. Yes, I continuously gave them discounts. It was convenient for them and so there was a value for each individual. I had many companies that allowed me to come in and set up little baby shops inside their own corporate office or lobby area.

{audio:0:07:45} I never really got into door-to-door pick-up and delivery because it was very difficult to do business in Nashville, to hire people that would consistently come to work, day by day. It was not a very good area to hire people.

{audio:0:08:07} So you would pick up the laundry and you would take it back to that central warehouse that you had or would you take it to the nearest store?

{audio:0:08:16} In the beginning, we took it to the central location. We had four very large, 100-pound dry cleaning machines. As far as the commercial washing machines, we had almost 30 100-pound machines and we had over 50 dryers. We had a lot of equipment, in terms of washing. For the dry cleaning, we had the four machines and they were constantly working.

{audio:0:08:52} What equipment did you have in the 28 local stores?

{audio:0:08:55} At that time, in the very beginning, what happened was that when DCI Management came to Nashville – and I don’t remember exactly when that was – they started buying up a lot of mom-and-pop shops. In the past, if you bought a dry cleaning business and you bought a business that had been in that location for a long time, it had value. When you are buying equipment and a past business, you look at the volume. Not everybody has brand new equipment. For some reason, in Tennessee, when we first showed up in 2001, we noticed that a lot of our neighbors, who had been there for 30 or 40 years, they didn’t replace their equipment very often. They probably had a great customer base but their equipment was worn out and they didn’t really update it.

{audio:0:10:02} They probably couldn’t pass their business down to the next generation, so they decided to sell out. I think that’s what happened in the Nashville area. So DCI Management, apparently went around, all over the Nashville area, and bought up a lot of good older stores. But like any store, it doesn’t matter if you’ve got 40 years of experience, if the owner has gone, then you’d better put somebody in there who was able to handle and talk to customers and manage the customers. If you don’t know how to manage the customers, then you start losing.

{audio:0:10:40} So you bought your stores and the central warehouse from DCI; did that have new equipment in it or did you have to replace that immediately?

{audio:0:10:48} The central location wasn’t part of the deal. All the stores were part of the deal. We had to start paying rent for every location and we paid for all the employees. But as far as the central location, we ended up only staying there for about eight months. It wasn’t part of the deal so we just, basically, rented all that equipment and that facility.

{audio:0:11:24} In that big central warehouse, you rented that equipment and you put some equipment into the stores?

{audio:0:11:31} Originally, the three of us, the brothers-in-law, were going to take over and run it. We could still lease the equipment and the warehouse and all the vans, but once I came in February, and my other brothers-in-law had been there since the summer the year before, I came to realize, after two months, that my oldest brother-in-law could just not keep up with the volume and his appointed part of the work. It was just too much for him. My other brother-in-law is a bit of a gambler and he’s not much of a cleaner but he was part of it. I should just kindly say that he was not very effective. I’ve never been in a partnership but my wife convinced me, it’s family. I came to the realization, after two months, that there’s no way I’m going to work with two of my older brothers-in-law and then split everything because I’m the one who comes in at 4:30 in the morning and leaves at 11:30. My brothers-in-law, they didn’t want to work.

{audio:0:12:56} Did you start running all of the stores or a portion of the stores?

{audio:0:13:00} The way we ran our stores was that, obviously, sometimes we had one attendant that would open the store at 7:00 and close at 6:30; those were our hours. Or we would have two people. One would come in and open and one would come in some time around 2:00 and close.

{audio:0:13:21} So one person manages the store and then you’ve got a bunch of equipment in that laundry store?

{audio:0:13:26} No; that’s how we ran the pick-up station. When we decided to split up, I had to look at the location and I didn’t want to move the location. Some locations used to have equipment but DCI Management took it out. When you have equipment on site, you really need more than one or two attendants, so they just consolidated it, thinking they could just run it as a pick-up station. But if you want to be a really effective dry cleaner, you should do everything on site.

{audio:0:14:14} Did you put equipment back in the stores?

{audio:0:14:18} We started putting equipment back in certain stores so that it would be more efficient for me.

{audio:0:14:26} Let’s take the average one that is doing $400 to $500 per day in revenue, how much equipment would you have in the store and what type of equipment would it be?

{audio:0:14:41} The thing about the dry cleaning business is, unless you are doing $2,500 or more, you’re still going to use the same equipment. Let’s say I’m only doing $100 a day because it’s a brand-new store, but you still need basic equipment. What kind of equipment is involved in a store? If you are a full dry cleaning store, you need a dry cleaning machine; you need a washing machine; you need a dryer. You are going to need a pressing machine for pants; it’s called a pant legger. They actually have a Suzy, which is a type of mannequin with a shoulder. That Suzy is definitely something you need to have and then you have a topper, which looks similar to a leg press, but it’s a topper. The dry clean side is all padded, the press that’s coming down is padded, the bottom part of the vacuum is padded. If you are a dry cleaner, in order to do all types of clothes, you need a pant presser, a top presser and you need a minimum of a Suzy and then you have a little station that we call a mushroom station. Some people just call it mushroom topper, which is a small table, one and a half by three feet wide and it has three different things. It has a very small mushroom topper for an inside shoulder and then you’ve got a little long one for the sleeves and then you have another one you use in a bigger area; sometimes you use it on a bigger guy’s pants, just to steam it out.

{audio:0:16:40} Even without all those extra toppers, which are really basic, you still need two press machines and you need a Suzy, in order to do dry cleaning. On the laundry side, you definitely need a shirt press machine. Some people have one buck or two bucks, which means you are only going to do one shirt at a time, but while you are waiting for it to do its thing, it will spin around so you can, basically, continuously do shirts. We had a good one buck machine – the one in particular that we had was made by a Japanese company, called Sankosha – and in 2001, I was the first one to bring it to Tennessee and that machine was awesome. I could do as much as a two-buck machine, as long as you knew what you were doing. You’ve got to be like a robot. You’re working with a robot and you’ve got to rotate like a robot.

{audio:0:17:44} That’s a lot of equipment for a small laundry store.

{audio:0:17:48} But if you don’t have a shirt press machine, you can’t press all those button-down shirts.

{audio:0:17:55} So you would have one dry cleaning machine, one washing machine, one shirt press machine, one dryer, two press machines, a topper and a mushroom station? Is that all the equipment?

{audio:0:18:06} No; on the laundry side, you need a short pant presser and a large presser. For example, sometimes we do bed sheets. We used to do a lot of bed sheets; in certain locations, people want their bed sheets cleaned and pressed.

{audio:0:18:27} So you need different pressers for laundry and for dry cleaning? They are separate machines?

{audio:0:18:33} Yes, because on the laundry side, the upper part where it comes down is literally steel metal and the bottom part is padded. You’re holding an iron that is the size of two feet by two and a half feet wide; that’s a heavy piece of metal just coming down that’s very hot.

{audio:0:18:58} How big are the stores because that’s a lot of equipment to have. I guess you have it out the back of the store?

{audio:0:19:02} Usually, if you have a plant, you could have it as minimal as 1,500 square feet but you’re basically choking yourself and you won’t have any room to move in there. I would say, ideally, you need to have a minimum of 2,000 square feet. Obviously, you are also going to have a little bit of a counter area. Even though people walk in and walk out, you still need somewhat of an area.

{audio:0:19:33} How much were each of those machines?

{audio:0:19:37} Last year, in the springtime, we replaced all the machines on the dry cleaning side. We have a leg press, what they call a topper, which is just like pants; you have two fake legs come out and you stick your pants on, you clamp and you push a couple of buttons and it will produce steam from inside and blow it outside. It will look as if the pants are standing by themselves. Why do you do that? Not every pair of pants is the same, obviously. Some are thicker, some are thinner. For some, it will help if you do the extra step of straightening up the upper part of the pants. If you don’t have that, you can literally do it with your hand-held iron. But if you’re not that skilled, it just takes longer.

{audio:0:20:57} Starting on the dry cleaning side, how much are the machines, individually?

{audio:0:21:03} I don’t remember every price and there are so many different brands out there.

{audio:0:21:11} Would you purchase them or lease them?

{audio:0:21:12} We always purchased ours. I’m a firm believer in the fact that you had better make sure you can afford it. We don’t do any lease because then it’s not your business.

{audio:0:21:30} How long did the machines last, thinking about the dry cleaning versus the laundry ones?

{audio:0:21:34} In the old days, those press machines were literally made out of iron, solid metal. Nowadays, they’re more flimsy and only the moving part is iron. They are not as heavy as the old ones. The part that comes down is not as heavy but that doesn’t mean it works any better or worse, it’s just that they made it lighter. It should last forever for what they charge us, but it doesn’t.

{audio:0:22:06} How much are the machines, roughly? Are we talking $5,000, $10,000?

{audio:0:22:11} Brand new ones are anywhere from $5,000 to $7,000.

{audio:0:22:17} On the dry cleaning side or both sides?

{audio:0:22:19} On the dry cleaning side. But it depends on what brand you get and what options it has. It should at least have an option to push a button to have the heads come down; that’s basic. Some of them have another option where it would hold to for a certain number of seconds and you could do longer or shorter or it could be manual. Obviously, when the top part comes down, there should be a lever for you to manually do the steaming. All the bottom part does is sits still but it has a vacuum part, where you start the vacuum with your feet. People don’t realize, once you put fabric on top of a press machine, they need to be held there, in place, so we use a vacuum to suck the air out so the fabric doesn’t move.

{audio:0:23:26} How much of your revenue was laundry and dry cleaning or does every customer get both?

{audio:0:23:34} Most customers are both. They do laundry and dry cleaning.

{audio:0:23:40} If you were to estimate, would you have to replace the equipment every five years?

{audio:0:23:46} No; if you do a good maintenance, it should last, I believe, at least 20 years, but it’s not true. For example, I bought the latest and the best for my equipment, with a big name on it. I’m not even going to mention the name because what’s the point? I’m American and I like to buy American-made products but, guess what, all those American-made companies left. There are only a few that are still in business and they make their products in America. A lot of the American companies went overseas.

{audio:0:24:29} In terms of operating the machines, do you need any parts or are there any other materials that have to be purchased?

{audio:0:24:39} Any commercial equipment breaks down so you need to keep up with it. But even if you keep up with everything, the problem is that when they manufacture this equipment, I think they have an idea that it should only last 10 years. I thought I was purchasing American-made laundry equipment and, later on, I found out that it hadn’t even been manufactured in America. It was manufactured in another country and they just put their name on it. The kicker is, let’s say, for example, the washing machine was $15,000, they made enough parts to replace whatever might break but, after about five to seven years, they stopped even making the parts. Do you know why I had to replace that equipment? It’s not because I had major parts breaking down, but because I couldn’t get any more parts.

{audio:0:25:37} What are the parts you need for the washer?

{audio:0:25:40} The part that tends to break down on a washing machine is the pump. When you have that little computer board, it’s rare that the computer board breaks unless you don’t do any maintenance. Some dry cleaners are really nasty and they don’t clean up after themselves. When you walk into a dry cleaning facility, whether they cleaned it yesterday, today, after they’ve cleaned a day’s worth, you produce so much lint and dust that you can literally have two handfuls of dust, per day.

{audio:0:26:24} Does that block the pump?

{audio:0:26:26} It can clog up things and it will just land on it overnight and it gets caked on. You’ve got parts that move; you’ve got parts that get wet; you’ve got parts that get hot. It’s a lot of moving parts.

{audio:0:26:42} What did you have to replace, in your time, for the washers? Is that only on the washing side and not on the dry cleaning side, for the parts?

{audio:0:26:49} What we’re talking about right now is the washing machine. What I had to replace on the washing machine, all the time, was the pumps. With these commercial washing machines, it depends on what type of soap you use. Often, soap companies will provide you with automatic pumps, as long as you buy their solutions.

{audio:0:27:18} They were free; they’d come and install it and connect it with your machine and they’d mount it on the walls, as long as you buy their liquid soap that would automatically put enough in there.

{audio:0:27:31} So you would purchase the soap and the chemicals and they would come and maintain and fix the pump?

{audio:0:27:38} They don’t maintain it; they just give you a free pump.

{audio:0:27:43} What about the other parts that break? Do they give you any other free parts?

{audio:0:27:47} The only thing the soap company does is that they have a technical guy come and give you a free pump. A manufacturer has, I believe, a number in the computer. For example, let’s say your manufacturer set the washing machine for 1,000 washes. Somehow, one day, you get to 1,000 and then, all of a sudden, the program starts messing up. That’s my experience. You call your washing machine solution guy and he will come and reprogram it for you. Or you take the manual you got when you bought the machine and then you have to reprogram it yourself.

{audio:0:28:34} Who is the technician or the maintenance guy that you would call to fix that?

{audio:0:28:39} The company I buy the soap from.

{audio:0:28:43} Is that the manufacturer?

{audio:0:28:46} Yes; they usually have one or two guys who do the pre-programming for different commercial equipment.

{audio:0:28:54} The company that sells the equipment is also the company that sells the chemicals and the soap?

{audio:0:29:00} The company that makes the equipment only sells the equipment and parts. But the chemical guys, the soap guys, are the ones who come and pre-program it for you. It just makes it easy and efficient, according to them, so that you keep on using their soap.

{audio:0:29:20} Who are these companies? Are they big distributors?

{audio:0:29:23} Yes; they are big distributors.

{audio:0:29:26} Which companies did you buy from?

{audio:0:29:33} My mind just went blank. Let’s just say, company A manufacturers and they are the ones who have those technicians.

{audio:0:29:44} How important are they for your business? Do you really rely on them?

{audio:0:29:47} Yes; it’s very good and they know what they’re doing. Not only do they go to the dry cleaning industry, they also go to the coin laundry industry and set that up too.

{audio:0:30:04} But you have to buy the soap, obviously?

{audio:0:30:06} Yes, you buy the soap from them.

{audio:0:30:08} How much soap do you have to buy a month or a year?

{audio:0:30:12} There is no set amount as it depends on the volume of what you wash. For me, per store, let’s just say I would go through over 1,400 to 1,500 pounds of it, just for the washing soap. Then you have your stain removers and the starch. Then you have solutions or powders that actually change the alkaline of the pH in the water, while you are soaking. You have chemicals that are just made to bleach. It’s not a bleach like Clorox. Imagine you had a light blue shirt and you had a bit spot the size of the biggest coin you can imagine of paint or ink from the ballpoint pen, for example. Instead of throwing away $30, $80, $100 shirts, I can mix a certain solution and soak it in hot water, overnight and, believe it or not, that light blue shirt becomes an almost light pink shirt. But don’t freak out because, without adding any more chemicals, you just throw it in the machine and wash it cold. The ink disappears but the shirt becomes light blue again.

{audio:0:31:53} You must spend a lot of money on the solutions and the liquids.

{audio:0:31:56} Yes, you do spend a lot of money on the solutions. You also come up with your own solutions.

{audio:0:32:04} Why doesn’t the equipment manufacturer have this relationship with you, to sell the liquids and do the technician work? Can’t they be the technician and the maintenance, as well?

{audio:0:32:22} I have no idea why, but they’re not. Everybody has their preference. There are companies that have been around for a very long time and there are new companies all the time.

Former Owner and Operator of 28 Dryclean USA Stores

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