CHICAGO — When dry cleaners are looking to expand their market share, their options can be limited — especially in areas where population growth is slow or the market is oversaturated.
Many cleaners, especially in the wake of the pandemic, are finding that their competition, particularly “mom-and-pop” companies, are willing to make a deal and exit the industry.
If the price is right, this can be a winning situation for all involved.
Making an Offer
For Gary Glover, president of Puritan Cleaners, located in Richmond, Virginia, buying out competition is one of the methods his business has used to grow since its start in the 1930s.
“In the last three years, we’ve done a deal with a competitor that brought in two stores and two home delivery routes,” he says. That brought the total for Puritan to 14 stores, three plants and nine home delivery routes.
Glover says the pandemic helped move the deal along.
“They had been coming to us before COVID wanting to get out,” he says. “As COVID came in, they were more anxious to get out and we needed volume, so it was a win-win for both.”
Randy Parnham, CEO of Acme Cleaners in Orlando, Florida, has bought out two competitors in recent years — one in 2017 and the other in 2021. Acme Cleaners now has one plant, three drop stores and two routes.
“In 2017, I approached the owners, because I had heard through the grapevine — mostly suppliers and mechanics — that they were tired and would probably be open to getting out. I looked at the market that I wanted to be in, and I looked at their business. I decided that, if we brought our company in, we would be able to surpass the volume that they were doing. With the 2021 deal, [that competitor] approached me, looking to get out.”
Robert Strong, CEO of Country Club Cleaners in San Ramon, California, acquired what would become his company’s busiest store simply by talking to the landlord of a competitor.
“One of my customers knew the attorney for the previous owner, who had passed away. He called me and said, ‘If you call the landlord, you can take over our lease because we haven’t paid them rent.’ So, I took over the store, and I didn’t have to pay a penny for it to the previous owner.”
Country Club Cleaners is primarily a route pickup and delivery company, with two retail stores and two production facilities. While other facilities were available from that company, Strong’s biggest competitor at the time, he decided to only add the one location.
“At the time, they were a seven-store chain, and we knew that was their busiest location,” Strong says. “We could have taken more, but I didn’t want to bite off more than I could chew — which may have been a mistake, and it may have been genius.”
Since the other six stores have closed over the years, however, Strong believes he made the right decision by cherry-picking the store he brought into his fold.
“My thought process was, ‘This is a good deal, it’s in my trading area, and it was profitable from day one,’” he says. “It significantly added to our bottom line. I tell people that’s what put my kids through college — acquiring that store.”
Come back Tuesday for Part 2 of this series, where we’ll examine ways to ease customers of the store being purchased into the new owner’s system.
Have a question or comment? E-mail our editor Dave Davis at [email protected].
