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The Changing of the Tide

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Michael Nesbit is president of Houston-based MW Cleaners, the dry cleaning division of The Men’s Wearhouse®. (Photo: Bruce Beggs)

Bruce Beggs |

What it takes to grab a share of business in a changing, ever-competitive dry cleaning market

LONG BEACH, Calif. — It was a Sunday morning, so it was fitting that dry cleaning industry veteran Michael Nesbit would open his Fabricare educational seminar with a Bible verse.

Quoting James 3:1, he said, “Not many of you should presume to be teachers, my brothers, because you know that we who teach will be judged more strictly.”

“That means, first of all, when I look in the room here, there’s a lot of guys a lot better in the industry than I am,” he says. “And I’m humbled to be here.”

Nesbit, who heads Houston-based MW Cleaners, the dry cleaning division of The Men’s Wearhouse®, had a great deal of insight to offer based on years of hard work and industry success.

“I want to tell you that the industry’s not dead,” he says. “There is still a lot of opportunity in what we do.”

And so he began discussing The Changing of the Tide.

GAINING EXPERIENCE

Nesbit’s work ethic formed early as he started his first business, a parking lot cleaning service, when he was 16. By the time he was a high school senior, he was managing a group of people in cleaning 200 properties in Houston.

Dry cleaning entered his life when, while attending Sam Houston State University, he was called home to help at a dry cleaning business when his stepfather suffered a heart attack. He fell in love with the business and soon was looking to invest his savings into a dry cleaning franchise.

Eventually, Nesbit joined forces with a financial principal to start Nesbit’s Cleaners in 1978. The business grew from one store to 22 locations and three home pickup and delivery routes in 2003. Its newest plant at the time won Plant of the Year honors in an American Drycleaner Plant Design Awards contest for its innovative design and drive-thru concept.

The Men’s Wearhouse, a Houston-based company wanting to enter the dry cleaning business to complement its men’s dress apparel, identified Nesbit as someone who could run such a business. But Nesbit’s Cleaners was well established in the local community and he had no interest.

“But they kept coming back to me, the second time, third time, fourth time, and every time they came back to me, they raised the number.” They recruited him to grow their new brand nationally.

And so it is that The Men’s Wearhouse acquired Nesbit’s Cleaners and Nesbit became president of MW Cleaners. Under his direction, MW Cleaners has expanded to 37 Houston locations, including 22 home pickup and delivery routes. Its nine production facilities and 350 employees produce about 6 million garments annually. Annual revenues for 2012 were expected to exceed $26 million.

MW Cleaners also offers a wedding gown preservation service business to business. Nesbit’s son, Kyle, runs it. At the time of his presentation, it expected to preserve 45,000 gowns in 2012.

“We are the largest dry cleaner in the world,” Nesbit announces. “We produce about 20 million pieces annually. Six million of that is retail, and the balance of that would be tuxedo cleaning.”

While The Men’s Wearhouse and MW Cleaners are part of the same family, their business models are quite different, Nesbit says, and it’s taken the apparel retailer some time to figure that out.

“Their customers come in once a year or less, our customers come in every two or three weeks,” he says. “We know their names, we know their dogs, we know everybody. … They rented 6 million tuxedoes last year that represented almost $400 million in revenue. I cleaned 6 million pieces and did $26 million. … We have to handle a lot more pieces than they do, because of that revenue per piece.”

Understanding that dry cleaning is a business driven by real estate, it’s been Nesbit’s task to grow MW Cleaners with less real estate. “Today, our business is almost 40% home pickup and delivery, from 3% seven years ago when they bought it. If I can figure out a way to do home pickup and delivery, and mitigate the amount of real estate, then I’m out of Houston.”

TURN THE TIDE

The arrival of Tide Dry Cleaners and its expanding franchise system has gotten a lot of attention and may even sparked fear in some operators, Nesbit says. “Tide brings new levels of sophistication to the market. I don’t want you to be scared, I want you to be prepared, not just for Tide but for the competitor around the corner.”

Tide has invested a great deal of money doing market research in major cities throughout the country, according to Nesbit, and they’ve learned three things about the average dry cleaner: “We’re dark, we’re dirty, and we suck. That’s what consumers told them. What did that spell to them: opportunity!”

The market is changing, and there are different competitors in the marketplace. How do you get a bigger piece of a smaller pie?

Start with the basics. What are the four reasons why customers choose a cleaner? It’s convenience/location, customer service, quality and price, according to Nesbit.

“Why the hell do we keep focusing on price?” he asks. “I come to these meetings and you know what I hear about: Groupon. … At the end of the day, there is no magic pill. It’s about getting in there every single day. This is a hard, tough business, and we’ve just got to keep doing it and doing it right.”

Of MW Cleaners’ 37 locations, 28 have drive-thrus. Nesbit places a lot of emphasis on the real estate, because the No. 1 reason that customers choose a cleaner is convenience. “As leases come up, I’ll move to another spot and put in a drive-thru, because I’m going to get a 20% lift (in business),” he says.

Having a good location is important, but don’t fall into the trap of opening a dry store just because the rent is cheap. You’ve got to treat it with as much care as you treat your plant stores. “We go put a dry store in because it’s got cheap rent, then we put ‘one-tooth Mary’ in there,” Nesbit says. “She’s not good enough to work at the plant, but we’re gonna put her (at the counter)? It’s a self-fulfilling prophecy.”

MW Cleaners routinely uses direct mail to reach prospective customers. “We pick a polygon around our locations. Every month, I’m sending out coupons to a third of that polygon. When the (end of the) year comes around, I’ve touched every one of those non-customers.

“And I don’t wait for business to get bad before I do marketing. I consistently do marketing.”

Once MW Cleaners gets a customer through a special offer, it sends them another offer via e-mail. As long as this customer keeps responding to and using these offers, MW keeps sending them. When MW has sent three offers that have not been used, it discontinues sending offers to that customer.

“What I don’t want to do is discount to everybody. Price is in the top four, price is up there. But it’s not in the top three, and I’d rather focus on the top three.”

Cleaners often lament that they need to improve their customer service, but they don’t give their employees guidelines for what good customer service looks like. MW Cleaners uses an acronym—SMILE—for that:

S — Speak and acknowledge a customer as soon as they enter the door. Say the customer’s name frequently. Speak first and last. Speak and acknowledge a customer, even if you are busy with someone else. Smile and be friendly.

M — Make eye contact. Make the customer experience as pleasant as possible. Make the customer feel important.

I — Image must be maintained with clean, neat stores and well-groomed, properly uniformed employees.

L — Listen to the customer’s request, complaints and concerns. Listen, listen, listen!

E — Exceed customer expectations!

To be its very best, every business has to examine itself through a consumer’s eyes and provide the kind of service a customer expects.

“At the end of the day, there’s no magic solution to what we do,” Nesbit says. “It’s really about focusing on the core competencies of our business. And it’s day in, day out.”

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

Comments

Direct Mail

Hi Bruce,

Do you know roughly how many households Mr. Nesbit is sending direct mail to when he "picks a polygon around his locations and sends out coupons to a third of that polygon."

Thanks,

Eric.

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