Economy's dirty little secret

Dry cleaners say slow economy stinks, literally


The Atlanta Journal-Constitution
Published on: 05/02/08

Alan Won is no economist, but he can tell when the economy stinks.

Customers at his three metro Atlanta dry cleaners are going longer without having their clothes cleaned.

Bob Andres/AJC
Alan Won works at the spotting station at Urich's Cleaners in Sandy Springs.
 
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"I've noticed more stains. And they're smellier," said Won, who owns Urich's Cleaners in Sandy Springs. "There's deeper rings around the neck and cuff areas, and we need to scrub more. It tells me the economy's bad."

Add your friendly neighborhood dry cleaner to the current domestic and global economic wringer.

Aside from smellier clothes and fewer customers, many metro Atlanta cleaners are dealing with higher supply prices.

Marietta dry cleaner Shaileh Patel said he is paying 30 percent to 40 percent more for cleaning chemicals, plastic bags and other supplies, partly because of the skyrocketing cost of oil. At the same time, he's seeing 30 percent to 40 percent fewer customers — a possible consequence of customers juggling higher food and gas prices. Those who do come in aren't bringing in as many clothes.

"They used to bring in 10 items. Now they bring in six or seven," said Patel, owner of That Cleaning Place.

What's more, recent changes in trade policies also are putting the squeeze on dry cleaners, most of which are mom-and-pop outlets.

In March, a federal tariff was placed on wire hangers imported from China after the U.S. Department of Commerce found evidence of dumping.

Dumping is illegal and occurs when a foreign company floods the U.S. market with products sold at cheaper prices to try to drive American competitors out of business.

The federal tariff caused Chinese suppliers to reduce their exports, creating hanger shortages and causing prices to rise.

"We preliminarily found dumping," said Brittany Eck, a spokeswoman for the Commerce Department's Import Administration.

When told of the tariff's impact on dry cleaners, Eck said, "We do accept comments from all interested parties." The department will issue its final ruling in June, Eck said.

In the meantime, that global trade drama now reaches into the clothes bins and cash registers of America's dry cleaners.

Won now pays twice as much for hangers than he did last July. Dry cleaners use thousands of hangers, and thousands more end up being tossed out by customers.

The shortage prompted Patel to post a sign in his Marietta business asking customers to return hangers.

Won recently wrote Commerce officials protesting the higher hanger costs. He asked the agency to "lift the taxes on the Chinese hangers," saying they were hurting American dry cleaners.

More importantly, Won said, "This impacts consumers' pockets."

Hampton resident Harry Thompson stopped by Courtesy Cleaners Thursday to drop off a suit for a weekend wedding. Thompson rarely takes his clothes to the cleaners.

But others, like Pam Valdez of Sandy Springs, depend on cleaners.

"My husband and I both work, and we have to have our clothes cleaned," she said.

Meanwhile, Won, who heads the metro area's largest collection of dry cleaners, the Korean Cleaners Association of Atlanta, has launched a hanger-recycling campaign.

Korean cleaners make up more than half of the region's estimated 1,400 cleaners, Won said.

If that weren't enough, the leases on Won's three cleaning shops rose 3 percent to 5 percent in February.

"This is the worst time I've ever experienced," said Won, who came to the U.S. from South Korea about 30 years ago, just as the country was emerging from the last major oil crisis.

The former insurance agent got into dry-cleaning in the early 1990s to help his wife, Song, who had a business taking in clothes and transporting them to cleaning facilities.

They decided to expand into a full-service business that included laundry services, alterations and dry cleaning. Their decision proved fruitful, as the economy flourished, creating more well-off, well-dressed business executives and office workers who needed to keep their white collars starched and pressed.

"This industry really exploded and bloomed in the last 10 years," Won said. But, he added, current economic conditions are "as bad as I've ever seen it."

Despite the economic hit, neither Won nor Patel said they plan to pass higher costs on to customers — yet — although other cleaners have begun doing so.

"I've owned this place for 15 years, and I've never raised prices," Patel said. "But this time I may be forced to. What can I do?"


A DRY CLEANER'S COSTS
Dry cleaner Alan Won breaks down the changes:
500 hangers: Last July — $28. Now — $60.
25-pound box of plastic film: Last July — $25. Now — $30.50.
Monthly gas bill: A year ago — $1,000. Now — $1,400.

CONSUMER'S COSTS
Shirts: 99 cents to $1.50. (In 1991, when Won got into the business, it was 80 cents).
Pants: $4.25 to $5. (In 1991, $3.50).

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