CHICAGO — The laundry and linen services industry provides textile services for key markets across the country.
From healthcare to food and beverage (F&B), from hotels to manufacturing, staying ahead of the curve is vital to the success of a laundry operation that serves one or more of these markets.
That’s why American Laundry News communicated with two industry insiders to share what they’re seeing now and into 2025 for key markets served by laundry and linen service operators.
ASSOCIATION PERSPECTIVE
TRSA’s members process nearly 90% of all commercially laundered linens, uniforms, garments and other reusable textiles in North America
“Our members are in every segment of the commercial laundry industry: food and beverage, healthcare, hotels and other forms of hospitality, and industrial businesses such as manufacturing, wholesale, construction, retail and service businesses,” says Joseph Ricci, president and CEO of TRSA, the association for linen, uniform and facility services.
“Every year, TRSA members share performance stats with each other. It’s our way to take the pulse on the industry’s performance.
“They report a variety of indicators from their balance sheets and income statements, including profitability, capital expenses and sales.”
Most recently, median profit margins for the industrial uniform segment were the highest in five years and the highest for all four segments of TRSA’s members.
High U.S. employment has kept wearer numbers high. Meanwhile, healthcare and F&B were both stable and more closely aligned to levels seen before COVID-19.
“I’d say the health of our industry is strong and growing stronger considering where we’ve been,” says Ricci.
“COVID-19 was a shock to the system for the restaurant and hotel industries, and our industry felt it. Our members have shaken off the symptoms and are back to normal—quite busy.
“However, when the worst of COVID-19 was behind us, during the inflationary period that put a strain on so many businesses and customers, our expenses rose. Even though we still face some headwinds, profitability has recovered.”
Both the linen (companies most heavily invested in F&B, hospitality or healthcare markets) and uniform (industrial) segments are moderating from record highs, according to TRSA’s investment analyst partner, Robert W. Baird & Co.
“Their most recent quarterly survey of our industry found that nearly half—46% industrial, 47% linen—of respondents reported revenues falling short of expectations during the third quarter of this year,” Ricci shares.
Thirteen percent of linen respondents and 8% of industrial beat revenue expectations. Both segments expect revenue growth of less than 3% over the next 12 months—the lowest projection since COVID-19. Expectations for the future seem increasingly more modest.
“As the association that advocates on behalf of the industry, we are always concerned about a changing regulatory environment that can create additional burdens and costs for our industry,” Ricci shares.
“Right now, we are confronting stricter EPA standards on fine particulate matter and new rules and reporting requirements for hazardous wastes. At the same time, the U.S. Department of Labor is trying to revamp its overtime rules and issue new heat and illness rules through OSHA.
“All these possible new rules are well-intended but can impose significant costs and uncertainty that undermine the health of businesses. That’s why we are working closely with these agencies and other stakeholders to deliver outcomes that serve the best interests of our members, their employees and customers.”
Fortunately, Baird has found that interest in new business remains strong, and in fact, the amount of new business available was stronger in the third quarter of this year, according to Ricci.
“All segments of the industry are exploring ways to leverage the AI (artificial intelligence) revolution to help make their businesses more efficient and successful, whether that’s analyzing risks to mitigate potential problems or streamlining a business’s human resources processes,” he says.
“There are still more questions than answers and companies are moving forward cautiously, but it’s certainly an area that can strengthen the industry.”
One market that is considered to be rising is healthcare PPE (personal protective equipment).
“There is a growing interest among policymakers to diversify our nation’s supply of healthcare PPE,” Ricci points out. “As we know, hospitals and other facilities were caught flat-footed during the COVID-19 pandemic with severe shortages of PPE threatening the safety of frontline healthcare workers and patients.
“Then our East Coast dock workers threatened a strike, and we quickly remembered that there are other vulnerabilities to the supply of PPE if we don’t strike a better balance between reusables and disposables and quickly.
“A report earlier this year by experts at the National Academies of Sciences, Engineering and Medicine helped shine light on this issue and charted the course for greater use of reusable textiles and PPE in healthcare. There are efforts in Washington D.C. and state capitals to require more hygienically clean reusable textiles in healthcare.
“It makes sense from a health and safety perspective, as well as from the perspectives of costs, sustainability and supply-chain resiliency during future public health emergencies.”
Check back Thursday for an operator’s market insights.
Have a question or comment? E-mail our editor Matt Poe at [email protected].
