FARGO - For the drycleaning industry, the COVID-19 pandemic has “been a defining moment,” says Rial Stedman.
Stedman, who co-owns Camelot Cleaners, says he and his business partner Haytham Al Saegh have kept their operation going, but it hasn’t been easy.
Camelot is down to two locations, one in south Fargo near Interstate 94, and one in north Fargo near North Dakota State University. The South University Drive location was shut down last spring; the downtown Moorhead store closed a few months later.
With customers working from home, there’s been no need for cleaning dressier clothes typically worn to the office. Also, a nice suit or dress isn’t needed for a virtual church service.
The loss of business has been a hammer blow after a couple decades erosion in drycleaning use as Americans opt for comfort in all facets of life.
“The fact that we’ve been able to scale down has been able to help the situation,” Stedman said during a tour of the north Fargo production facility in early December.
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The business has pivoted to doing more commercial laundry work and pickup and dropoff, but without federal Paycheck Protection Program loans, Camelot would have been “one equipment breakdown from being done,” Stedman said.
“We’re at four (outlets) and holding our own,” Bill Brenan, the president and operating partner of Brenan’s Drycleaning & Laundry, said in a recent interview at his downtown Fargo production facility.
“We have not laid anybody off. It’s been close” though, Brenan said. Hours have been cut in the production plant and some of the stores have had hours shortened.
In the midst of the pandemic, demand for drycleaning has plummeted.
Most annual Christmas parties have been cancelled. Weddings, funerals and other gatherings have been trimmed to perhaps 10 to 15 people attending.
“Your group functions are totally destroyed,” Brenan said.
Brenan, too, credits the PPP loans for helping to keep his three Fargo and one West Fargo shops open. And he’s been able to remain open as an essential service - helping other businesses maintain their cleanliness.
Three of his four landlords have “stepped over backwards” to help him stay in business, Brenan said.
“They understand. They’d rather work with us for six to eight months, maybe a year, and have a full space,” rather than an empty building, Brenan said. “We certainly appreciate that.”
Brenan said the company has had pickup and delivery to homes for a while, which put it ahead of the learning curve for the pandemic. “You don’t even have to leave the house anymore. There are things we can do to accommodate people,” he said.
Bloomberg News reports that the drycleaning industry has been wounded by this pandemic.
One in six drycleaners have closed or gone bankrupt in the U.S. already, according to the New York-based National Cleaners Association. Nationwide, the industry is likely booking only half the $7 billion in revenue it did pre-COVID-19, according to the NCA. More than 90% of owners aren't taking a paycheck, and about half are paying employees out of their savings, Bloomberg reports.
"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,” she told Bloomberg in late November.
Even before the pandemic, the drycleaning 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.
Darcy Nelson, the general manager for Brenan’s, said it looks like some people are coming back to their stores.
“I have seen customer names that I haven’t seen in awhile that are starting to trickle back in. We are seeing a slow increase.” She hopes for a return to normal in 2021.
“We hope that trend continues,” Bill Brenan agreed. “People were hunkered down. Period. Now, we’re seeing it start to crack.”
Beyond drycleaning, Stedman is also invested in several Fargo-Moorhead area Dairy Queen restaurants with drive-through capabilities.
The pandemic has even affected those comfort food havens.
Five restaurants with 90 employees last March are now down to 70 employees, Stedman said.
“There’s been a lot of days with hands on the head” and wondering what’s next, Stedman said.
He muses that the pandemic may be “right-sizing the markets.”
Still, it’s going to be up to customers to decide if Camelot or other businesses survive.
“We are still around and functioning. We’re definitely waiting for that market to come back,” Stedman said.
Brenan said small businesses like his will need some more help from Washington to survive the coronavirus pandemic.
“The reason you stay open is to help as many of these people (he points out to employees on the shop floor) as you can,” Brenan said.
“We will survive … but we need to make sure we don’t lose too many (small businesses) along the way,” Brenan said. “We’ll make it. We always have.”