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/ Magazine / Other Articles / Margins at risk, the challenges faced by MILANESE VERBANIA industrial laundry
by
MARZIO NAVA
We head to the hills of Verbania, overlooking Lake Maggiore, to visit an industrial facility that offers a privileged perspective on the local economy: the industrial laundry - Milanese. The company was founded by Marisa Saccaggi (Gnecco) and is today operationally led by Mauro, Alberto, Davide, and Luca Gnecco. It is with Luca Gnecco that we discuss the strategies needed to maintain financial stability in the laundry business.
“We primarily serve the hospitality sector, food & catering, and private healthcare facilities, particularly nursing homes (RSA). Our market is heavily influenced by local tourism, and seasonality directly impacts workloads. During the peak season, production operates at near full capacity, while in the low season, such as the current period, activity drops considerably. At present, we operate three days a week and are not at full production capacity”.
What impact does seasonality have on the company’s industrial structure?
“Seasonality is one of the structural elements of our business model. It affects not only production volumes, but also workforce organization, logistics, plant management, and the use of infrastructure. During the peak season, we reach full production capacity, while in winter our facilities are underused, which is not easy to compensate. This makes a flexible industrial model essential, one that can quickly adapt to fluctuations in demand”.
How do you manage staff in such a variable context?
“We have a stable workforce that guarantees operational continuity throughout the year, complemented by a substantial number of seasonal workers. We make use of the flexibility tools provided by the national collective labor agreement, such as compensating hours between periods of low and high production. From a management perspective, the HR director faces the complex task each year of balancing production needs, economic sustainability, and the availability of human resources”.
“This is a real and growing risk, which is why we have implemented a welfare system aimed at promoting employee well-being and supporting staff retention. Each year we hire seasonal staff, often already trained and loyal, with no guarantee of finding them again the following season. This challenge is amplified by demographic and territorial factors. The Verbano-Cusio-Ossola area has around 146.000 inhabitants and is experiencing significant population decline. While companies generally maintain stability, generational turnover is insufficient to replace retiring workers. Furthermore, the area is not particularly attractive, high housing costs and proximity to Switzerland, where wages are highly competitive, makes it difficult to retain qualified personnel”.
“It is extremely important. We have invested in automation and solutions related to 4.0 Industry, and now 5.0 Industry. This represents a profound transformation of the work structure: every operator must be trained, autonomous, and able to interact with automated and digital systems. While extraordinary skills are not required, a solid technical and IT foundation has now become essential. Automation is not only a driver of efficiency but also a key factor in maintaining high-quality standards and minimizing errors”.
How has the company’s revenue trend progressed over the past few years?
“Our performance is closely linked to economic cycles and tourism. We were heavily affected by the 2008–2009 crisis, which sharply reduced tourist flows, particularly from abroad. Another distinct phase was the health crisis triggered by Covid, which marked a turning point for the sector. Since 2015, with Expo Milano, we have seen a growth in workloads that, to some extent, continues today. However, we are currently monitoring the German economic situation closely, as a large share of tourism on Lake Maggiore comes from Germany, and any contraction in German industrial production inevitably impacts our region”.
“La redditività non si costruisce nel breve periodo, ma nel medio- lungo termine. È il risultato di un equilibrio tra investimenti, volumi, efficienza operativa e qualità del servizio. L’automazione è una delle principali leve per migliorare la produttività e contenere i costi. Le grandi commesse, come quelle dei grandi alberghi business di Milano, garantiscono stabilità dei volumi anche con margini inferiori, mentre noi lavoriamo con una moltitudine di clienti di piccole dimensioni che, nel loro insieme, contribuiscono in modo significativo al fatturato”.
Is your production structured around individual clients or by batch processing?
“Historically, we have operated on a warehouse stock basis. Our largest client accounts for less than 2% of turnover, meaning our customer base is extremely fragmented. In this context, digitalizing production processes has been crucial. We have invested heavily in computerized batch management and linen traceability, which has drastically reduced errors. The days of searching for materials with a delivery note in hand like diviners are over. Today, precision is a key competitive factor, particularly given such a fragmented client portfolio”.
“A central role. We work almost exclusively with long-term orders based on the laundry contract. This type of contract legitimizes the market and makes the work more professional. In the absence of structured contracts, the sector becomes less profitable and loses value. Our activity is based on a balance between labor compensation and invested capital, two elements that must be clearly defined in the contracts. Certain spot orders, like those for accommodating law enforcement personnel arranged by municipalities, remain the only exceptions”.
How did the company cope with the impact of the energy crisis?
“Under ordinary circumstances, our prices remain relatively stable. The surge in energy costs, however, forced the company to introduce an energy-related adjustment mechanism. The scale of the shock was unprecedented: in August 2019, the monthly gas bill amounted to around €27.000; by August 2022, with unchanged production volumes, it had soared to €223.000, an unsustainable level for any industrial operation. Faced with this scenario, the company informed its clients of the need to revise pricing conditions and apply an energy surcharge. Service was guaranteed under existing terms for a limited period, after which contracts were renegotiated. While some clients showed understanding, others were more reluctant; nonetheless, the company succeeded in navigating the most critical phase. It should also be noted that in 2022 many hotels closed earlier than usual to avoid escalating energy costs, a decision that had a direct and negative impact on laundry volumes as well”.
“From 2015 to 2019 we experienced a phase of steady growth, a rare phenomenon in our sector. We were expecting an exceptional 2020, but then Covid arrived. Today our turnover is higher than in the pre-Covid period, but the economic context has changed profoundly. Inflation and rising raw material costs, especially energy, have structurally altered our cost base. Paradoxically, the most difficult years were not those of Covid, but those marked by the surge in energy costs”.
How do workload volumes fluctuate over the year?
“During the high season, we process up to 350 quintals of linen per day, particularly between mid-July and August 20. In the low season, volumes fall to 150–200 quintals on alternate days. This substantial gap represents one of the main challenges in our operational model. In winter, the issue extends beyond staff retention to include linen storage. We maintain a warehouse dedicated exclusively to linen, which involves significant insurance costs that fluctuate with the volumes stored. Recently, we have also had to contend with the introduction of insurance coverage for catastrophic events, adding further economic and regulatory implications that are still not fully defined”.
Could you provide an overview of your pricing model?
“The primary cost driver is labor, including logistics, which represents approximately 35% of turnover. Linen costs follow at around 18%, while energy expenses account for roughly 8% under normal operating conditions. Labor remains the most critical and challenging cost to manage. The company faces competition from firms that engage in contractual dumping and fail to comply with the national collective labor agreement, a form of unfair competition that distorts the market and penalizes businesses operating within regulatory standards”. How much do you invest in machinery and innovation? “In recent years, we have maintained consistent investments, guided by the belief that process automation is essential for ensuring both quality and economic sustainability. These investments cover the entire production chain, from counting and washing to ironing and logistics. While the scale of investment varies year to year, the overall strategic approach remains unchanged. During the COVID-19 period, we scaled back machinery investments but continued investing in linen to fulfill pre-existing orders”.
“Automation has substantially reduced labor costs and streamlined management of a fragmented customer base. However, there is no one-size-fits-all solution: automation must be tailored to the specific market and regional characteristics. In a context like ours, with a highly diverse clientele and pronounced seasonal fluctuations, technology must remain flexible and adaptable”.
Which customer segments contribute most significantly to your overall revenue?
“Approximately 55% of our revenue is generated by the hospitality sector, 20% by catering, and the remaining 25% by nursing homes and healthcare linen. The catering segment has been gradually recovering since the COVID-19 pandemic. Table linens are not only an economic asset but also a cultural symbol of Italian identity. To reinforce this heritage, the company partners with local hospitality schools, offering students a learning pathway that underscores the industry’s significance and the importance of service quality”.
Which primary factors have the potential to negatively impact profitability?
“In addition to geopolitical and economic pressures, such as rising logistics costs and container freight rates, the company’s primary risk is a reduction in volumes, which disproportionately impacts operations by undermining economies of scale. Operational risks, including fires, require investments in insurance coverage and increasingly advanced safety systems. The company also faces illegal practices, such as contractual dumping and improper waste disposal, which distort competition and threaten the sector’s long-term sustainability”.
“Yes, it is a competitive market, though it was even more intense in the past. We aim to strike a balance between quality and price. Our clientele spans from small pizzerias to large hotels and high-end catering services. Service quality is closely tied to the type of fabric used and proper certified maintenance. This focus on quality also drives our investment in training and our ongoing collaboration with hospitality schools”.
Is the local market highly price-competitive?
“Yes, it is a competitive market, though it was even more intense in the past. We aim to strike a balance between quality and price. Our clientele spans from small pizzerias to large hotels and high-end catering services. Service quality is closely tied to the type of fabric used and proper certified maintenance. This focus on quality also drives our investment in training and our ongoing collaboration with hospitality schools”.
DETERGO MAGAZINE # FEBRUARY 2026
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In 1990 was founded the Association ASSOFORNITORI. In 2022 the name has been changed to ASSOCIAZIONE ITALIANA FORNITORI LAVANDERIE (ITALIAN ASSOCIATION OF LAUNDRY SUPPLIERS), with the acronym AIFL.
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