Dry cleaners are hardly alone in struggling during the pandemic. But while airlines and restaurants eventually will rebound as vaccines ease worries for travelers and diners, dry cleaners confront a more fundamental shift.
Working from home is probably here to stay, especially for white-collar employees. Companies from Facebook Inc. to Swiss bank UBS Group AG have said the switch could be permanent for some workers.
A post-covid economy in which more people work in their sweatpants instead of freshly pressed dress slacks could be devastating for the roughly 30,000 businesses that relied on professionals such as salespeople, real estate agents and bankers for half of the garments getting dry-cleaned before the pandemic.
One in six dry cleaners have closed or gone bankrupt in the U.S. already, and many won't survive without more stimulus, according to the National Cleaners Association. Nationwide, the industry is likely booking only half the $7 billion in revenue it did before the pandemic, according to the association. More than 90% of owners aren't taking a paycheck, and about half are paying employees out of their savings.
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"It's an ugly, ugly time," said Nora Nealis, executive director at the trade group, which has more than 2,000 members. "Most of them are holding on with their fingernails in hope of help."
The slump is particularly tough on Asian-American entrepreneurs, as they own at least 40% of dry-cleaning businesses, according to association estimates. Concentration of Asian-American workers in industries such as hospitality, retail and laundry service partly explained the disproportionately high level of job losses among them during the pandemic, according to research by Donald Mar of San Francisco State University and Paul Ong of the University of California at Los Angeles.
Overall, the number of Asian-American business owners was down 17% in September compared with February, according to data compiled by University of California at Santa Cruz economics professor Robert Fairlie. That was the worst among all races in the country.
In late September, about 32% of working days in the U.S. were spent at home -- down from 42% in May, according to surveys by Stanford University. The new work-from-home economy is likely to outlast the coronavirus that spawned it, said Nicholas Bloom, a professor of economics at Stanford. The share of working days spent at home is anticipated to rise to a quarter from 5% before the pandemic, he said.
While the plight of bar and gym owners has been in the spotlight, dry cleaners say they may have it as bad or even worse. Deemed essential businesses, cleaners weren't forced to shut down during the lockdowns. Their industry is nonetheless at risk for the foreseeable future.
"Businesses that serve primarily office workers are going to be tremendously impacted even in the long run," Bloom said. "Sandwich shops, dry cleaners."
Even before the pandemic, the dry-cleaning industry, which employs more than 120,000, was already struggling with declining demand for professional services and the growing adoption of business-casual attire in the office, according to research firm IbisWorld. They're the epitome of a family business, with no company owning more than 5% of the market.
To survive, many dry cleaners have begun to offer pickup and delivery, alterations or wash-and-fold services. Others diversified into commercial laundry for hospitals, or are now willing to launder comforters and curtains for consumers, said Mary Scalco, chief executive officer at Drycleaning and Laundry Institute, another trade association.
Rhonda Eysel's Master Kleen Dry Cleaners, with pickup locations in Georgia and Alabama, cut operations of its cleaning plant from five days a week to three, to reduce utility costs. Many of her 40 or so employees have had their schedules reduced to between 23 hours and 32 hours a week, she said.
"We are helping everyone to stay employed," Eysel said. Her grandfather started the dry cleaners in the mid-1960s, and she's been working there for more than 30 years, since she was 15.
"It's a tough industry to be in right now," Eysel said. "But it's important that we keep going. It's a learning process for sure."
Richard Bayliss, owner of the three-generation business Nu-Way Cleaners & Tailors in White Plains, N.Y., said his business is operating at about 45% of pre-pandemic levels. Now he is counting on companies to announce return-to-work plans early next year.
Meanwhile, he has a plea for corporate executives: institute a dress code for Zoom calls.
"To be there in sweatpants and sweatshirts, I wouldn't accept that," Bayliss said.