CHICAGO — Can we talk about ... shhhh ... piece counts? Did you just roll your eyes? Shake your head? Wait a sec. Stay with this a moment. Some pieces might be holding steady, and some might be up. Have you ever looked closely at the ‘types’ of pieces, not just the raw total number? Might be worth a look. Two drycleaning owners talk ‘piece.’
“Piece counts are a very important metric of any drycleaning business,” says John Palms, director of strategic alliances, general management and president/CEO of Bibbentuckers The Dry Cleaner, located in Dallas, Texas.
“Any reasonably advanced POS — that’s point of sale system — should be able to track piece counts year-over-year, or YOY for short. If you’re not growing your piece counts, you are in a declining sales/profit business — unless you are increasing your prices to offset the declining pieces,” relates Palms.
“In addition,” he continues, “declining drycleaning pieces, along with higher prices, is more negatively impactful than declining laundry pieces.”
Your piece counts, he notes, are directly aligned with sales/profit, employee hours and other key metrics.
Palms says his career started in “high tech, and dominated most of my first 20 years in business.” He notes that he worked in software and in manufacturing, and then started to investigate the drycleaning industry.
“Someone introduced me to the Bibbentuckers owners in late 2006 and we bought the company in March 2007. It was high-end and high-volume, with three great corner locations with a drive-thru and routes.
“We did 11 acquisitions in 11 years and have doubled the 2006 sales,” he adds. He now owns 14 stores with operations in Dallas and Austin, and has more acquisitions “in the pipeline.”
“Dry cleaners must continue to market to more potential pieces, such as households, rugs, shoes, leathers and furs,” Palms says, “as well as provide incentives for the customer to clean more pieces. For instance, bring in three golf shirts and the fourth is free, in all the seasons.”
Specifically, what are you hearing from peers and colleagues about this topic today?
“Whether you are a couture or discount cleaner, everyone appears to be experiencing flat to declining piece counts,” Palms says. “Annual price increases can help offset this reality but not entirely. And discount/mid-market cleaners cannot increase prices like higher-end, couture cleaners are able to.”
He believes that, in his own words, “Everyone is trying to grow or offset the piece count.” For example, he notes, wash-and-fold, and window treatment cleaning.
However, “There is only so much you can do,” he points out. “Our piece counts have gone up each year due to acquisitions.”
The term “piece count” gets thrown around. Do you think it’ s completely understood by cleaners?
“Yes, I believe most, if not all, dry cleaners know what piece counts mean. But they need to drill down on the YOY numbers and better understand what the real impact is to sales, costs and profits. And where, how, and how soon can we address or fix this?”
Are drycleaning owners looking closely enough at niche growth areas to get more pieces?
“I believe many are, or have been, looking at alternative piece-count sources,” Palms says. “But it takes focus and determination to discover a source and conduct a market test in-store and/or on the routes.”
He believes that many owner/operators should be discussing this in their trade group meetings, as well as discussing the challenges and solutions on a one-on-one basis.
“It is always good to share successes and failures as well as make new contacts in the industries,” Palms suggests. “You never know when you might need a favor or provide one.”
One thing drycleaning owners can be watchful of is to try not to group all pieces into one total count. “Qualifying” the pieces you clean is key, Palms indicates. Piece counts aren’t always just a one-to-one basis.
Palms points out: “One wedding dress piece count is worth a lot more than one jacket, and on the other side, five pairs of socks or 10 pieces are of far less value; so piece counts need to be evaluated with their respective product line strategy.”
This Texas owner shares some advice about piece counts in the fabricare business today.
“Focus on the piece count numbers and trends. Have meetings with staff on this topic. Make sure everyone knows the numbers, asks questions, and participates in the solutions. Analyze and compare counter vs. route piece counts,” Palms says.
“I believe you will find route piece counts are not declining or not as fast as counter pieces. Route orders are larger and route customers more ‘sticky.’”
He indicates that declining piece counts should be a driving force for operators to grow their routes more aggressively versus stores, reminding that the profitability of routes is also considerably higher than counter.
“Find the operators that are overcoming declining piece counts,” Palms hints. “You should be able to talk freely, and periodically, about winning strategies, with the owners that are not in your market and not competitors.”
Like this executive in Texas, a single-store owner in the Midwest is equally passionate about pieces cleaned, and he shares his world view. It’s another way to be at peace with piece.
Check back Thursday for the conclusion.