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Laundry and dry-cleaning shops, an open discussion with trade associations for a snapshot of the current situation

We start the year with a comprehensive overview, engaging in dialogue and comparison with the representative associations of small laundries, or more precisely, dry-cleaning and laundry shops. The goal is to capture a snapshot that allows us to better understand the actual situation of this specific sector. These associations represent approximately 15.000 laundries, a figure that fluctuates due to cyclical, structural, and family-related challenges. We are often talking about small businesses that desperately need entrepreneurial skills, vision, and a significant dose of innovation to thrive. Geographical location frequently becomes a crucial factor in determining the success of a business. However, the common denominator, the constant, the essential element as key to success remains the professionalism of the service and quality as added value. Laundries are undergoing a metamorphosis. For many years, the sector has been experiencing a selection process, with more and more businesses changing their structure, nature, and perspective. In this wide-ranging interview, we tackle the challenges, issues, but also the virtues and potential of the sector. We open the floor to questions and dialogue with the representatives of Assosecco – Franco Pirocchi, CNA – Maurizia D’Agostino and Confartigianato – Carla Lunardon

In the last five years, there has been a decline of over 20% regarding the activities of the dry-cleaning and laundry shops. Which can be the reason of this drop?

Franco Pirocchi (ASSOSECCO) – The sector is struggling with a generational change issue. When the laundry owner reaches the end of its career, it is extremely difficult to find a family member willing to take over the business, and even more challenging to find a buyer to acquire it. So, in the end, they find themselves in the situation to close down or continue working until exhaustion.
Maurizia D’Agostino (CNA) – There are several causes, and I would essentially distinguish them into five:
a) First and foremost, the reduction in profit margins due to increased costs of raw materials (such as polyethylene and iron) and energy expenses following Covid.

b) The pandemic brought about a social shift with the introduction of remote work, altering people’s habits. Spending more time at home increased the use of domestic washing machines.
c) Reduced purchasing power, also driven by rising inflation. People are reusing clothes more frequently to reduce laundry costs. A noticeable trend is that garments brought to the laundry are often dirtier than before (easily noticeable on shirt collars).
d) A crisis in the fashion industry. The importation of low-cost, low-quality clothing discourages consumers from using laundries for their garments care. Instead, people prefer to take the risk of improper domestic washing, even for delicate items. (Given the current emphasis on sustainability, it is unacceptable that no measures are being taken at EU level to counter the phenomenon of disposable clothing.)
e) Finally, the issue of generational change. Due to low profit margins and the demanding nature of the work, dry-cleaning and laundry businesses are no longer attractive to younger generations.

Carla Lunardon (CONFARTIGIANATO) – Twenty years ago, our country had a presence of laundry businesses more than double the European average. This fragmentation was unsustainable given the market upheaval that has occurred since 2000. The introduction of industry-specific legislation has also made it less easy for untrained or unprofessional figures to enter the market. The combined effect of these factors has led to a “natural” reduction in the number of such businesses. More recently, in the post-Covid period, this reduction has been accompanied by a slight increase in the average size of businesses. Companies are becoming more professional, better structured, offering complete and innovative services, and focusing on sustainability while meeting the diverse and evolving needs of their customers. This is the model that traditional laundry businesses should fallow if they want to succeed in an increasingly demanding market.

However, demographic stagnation, combined with the low appeal of this profession to younger generations, is substantially affecting the entrepreneurial framework. Every year, we lose a significant part of skills, tradition, and history. This phenomenon must be countered, or at least slowed down, particularly now, as the European sustainability goals for the fashion sector are positioning our industry at the forefront of environmental services. We consume less water, detergent, and energy than an equivalent home wash. Most importantly, our professionalism, combined with our specialized equipment and products, extends the lifespan of garments. Our goal should be to promote the sector to younger generations, highlighting that it not only aligns with the future but also offers the opportunity for engaging and undeniably valuable work.

The rising energy costs and for the consumable materials is objectively undermining the profitability of businesses. What should be done? Which countermeasures could be adopted?

Maurizia D’Agostino – The countermeasures could vary depending on the context. For a small company, one possible countermeasure could be to streamline the laundry process by prioritizing full loads (but who doesn’t do that?). Outsourcing part of the production process, perhaps the more expensive part, could be a good solution, especially considering the difficulty in finding personnel. A more structured company with multiple locations could choose to centralize the entire production process in a single location, thus maximizing production cycles while also working on behalf of third parties. Another measure not to be overlooked could be creating purchasing groups among laundries in order to have more bargaining power with suppliers.

Carla Lunardon – Three years of war in Ukraine have severely tested our companies that use gas and energy. Things have improved compared to 2022, but costs are still high compared to the pre- Covid period. High inflation has also significantly increased the costs of our consumables, from hangers to nylon, from detergents to machine maintenance. These costs are, of course, difficult to pass on to customers. On one hand, we need to raise the perception of our service in order to adjust prices, while on the other hand, we must focus on energy efficiency through the use of cutting-edge machinery and, of course, invest in photovoltaics where possible. Finally, it is worth considering participating in the various energy communities that are starting to emerge throughout the country, given that our service is energy-intensive during the day and can complement residential use, and we are often located in small municipalities where CERs have greater benefits.

Franco Pirocchi – The laundry sector is suffering from severe market saturation, meaning there are too many laundries compared to the real capacity of the various customer bases. The small laundry, managed solely by the owner, is less frequented lately due to various factors such as the transformation of fashion trends increasingly focused on casual outfits, the generational change of the customers who are less interested in laundry services compared to the previous generation, the economic crisis, high competition from shopping centres laundries and more structured laundry shops, etc. In this context, optimizing processes, such as simply filling the drycleaning machine, becomes difficult, leading to higher operating costs, while the volume of garments to process decreases. On the other hand, a proportional increase in list prices would have a negative effect on customers, further reducing the laundries’ revenues. The solution could be that of addressing to larger, more structured laundry laboratories, capable of processing large volumes and thus optimizing work stages and controlling production costs, while protecting themselves with a well-defined and detailed contract, keeping only some specific low-cost, high-quality tasks to be carried out in the shop without the need of using energy, such as folding or small tailoring operations.

One of the critical issues of the sector is the difficulty in finding workforce. Which could be the cause of this problem? Why is this profession unattractive to young people?
Is this a problem that can be solved with training and professional updating, or is something else needed?

Carla Lunardon – As I have mentioned earlier, we need to work on the image that young people have of our sector. From a recent survey we conducted, it comes out that they see us as “technicians” who carry out precisely the service requested by the client. They also recognize a certain social value in our profession. Unfortunately, there are also a series of prejudices (in terms of profitability, training, prestige, and professional development) that make such profession quite unattractive compared to the reality. All of this should make us reflect on the educational path required to approach these jobs. At the age when one should choose a vocational school that qualifies you for the future job, this sector doesn’t seem to be really appealing. Perhaps it would be worth considering alternative paths for later, when the decision could be more conscious and informed.

Franco Pirocchi – The problem should be tackled by distinguishing between the search for subordinate staff to be employed within structured laundry laboratories or large laundry shops, and the identification of new individuals willing to start their own laundry business. The premise is that we are talking about a craft-based activity, which requires significant physical effort and a certain level of manual skill, aspects that are not really an incentive for approaching this type of work. This is a problem that, moreover, affects many other sectors, both in commerce, industry, and services. For those who want to start a laundry business, it is important to understand that we are talking about a significant investment, with a final economic result that might not be particularly rewarding. In fact, analysing the income statement of a standard laundry that earns €60.000 per year under a flat-rate taxation, once all costs and taxes are deducted, and excluding any unexpected expenses, what remains is less than what a full-time employee in the same sector earns, without benefiting from related contractual protections such as paid holidays, illness leave, paid maternity leave, no severance pay, no business risks, or headaches, etc. Moreover, the owner of such a business must manage their specific work, handle customer relations, and fulfil the increasingly burdensome bureaucratic and administrative duties. To open a chain of laundry shops/delivery points, whether they are independent or supplementary to a centralized laundry laboratory, the initial investment is considerably high, we are in fact talking about several hundred thousand euros. These funds, if invested in other sectors with a well-thoughtout project, could prove to be much more profitable and less risky.

Maurizia D’Agostino – The problem of labour recruitment affects all sectors; otherwise, otherwise we would not explain the need to attract foreign labour to our country. The truth is that the work in this sector is predominantly physical, which means that young people prefer less strenuous jobs. Training and professional updating are essential to ensure service quality, but they cannot reduce the physical labour stress.

Do you think the €6,2 billion (in tax cuts) allocated by the government for 5.0 Transition, partially also for 2025, is a good incentive for the growth and innovation of your companies (also considering the experience of 4.0 Industry)?

Franco Pirocchi – The backbone of our association (Assosecco) is predominantly made up of small businesses like the one described earlier, and it could hardly be otherwise, given that 70% of Italian laundries correspond to that profile. Therefore, discussing 4.0 Industry, artificial intelligence, or 5.0 Transition in a sector with extremely limited digitalization and a not-so-young average age, it runs the risk of being purely theoretical exercise. On the other hand, those few, more structured activities that use these financial facilitation tools, in our opinion, apply them in a forced manner. It is really challenging to justify the replacement of ironing and dry/wet cleaning equipment as falling under protocols designed and conceived for entirely different contexts. The risk is that, as has already happened, the adaptation project might not be closely checked by the authorities responsible for examining the procedures used to grant these funds, leading to severe penalties.

Maurizia D’Agostino – Certainly it is a good incentive, but the problem lies in the timing because the 5.0 incentive expires at the end of 2025 with the consequence that companies, whether due to the difficulty and time needed to secure the necessary financial resources or due to the entire bureaucratic and procedural process, will struggle to take advantage of this opportunity.

Carla Lunardon – The program aims to support investments in digitalization and the green transition of businesses through an innovative tax credit scheme. Companies will be granted an automatic tax credit without any preliminary evaluation, and without discrimination based on company size, sector of activity or its location. Additionally, there will be also the possibility to make investments in new capital goods necessary for self-producing energy from renewable sources and expenses for training of the employees. This is an opportunity for our companies as well, especially to help reduce the “burden” of energy costs, which, as mentioned, has a significant negative impact. It will be important, as was also done during 4.0 Industry program, to have a dialogue with machinery manufacturers to understand if their equipment is meeting the requirements of this new regulations.

Looking beyond our borders, in Europe and around the world, what could we learn from the experiences of other countries (always making reference to laundry and drycleaning activities)?

Maurizia D’Agostino – The Italian model is unique. In Europe, the market is predominantly characterized by industrial and self-service laundries. In Italy, the widespread and extensive presence of small traditional laundries, while it might seem like excessive fragmentation, on the other hand, provides an unique added value in terms of professionalism, personalized services, customer care, and high business competence.

Carla Lunardon – I can confidently say that the professionalism and services offered by professional laundry businesses in our country are recognized as excellent. Small sized laundries are also our strength. The services of larger companies, like chains, standardize the service, making it less “tailored” and, in my humble opinion, of lower quality. What we can learn from abroad is the creation of national or regional analysis/training centres that serve as a reference point for our sector and for both the training required to enter the profession and ongoing professional development. There is a fantastic example in France that would be wonderful to replicate in Italy, perhaps starting with already active institutions like the Serico Center in Como.

Franco Pirocchi – In Europe, the U.S., and other technologically advanced countries (e.g., South Korea, Australia, Japan, etc.), activities located in shopping centres have significantly reduced, while laundries that adopt automated systems for both garment drop-off and pick-up are growing. These operations are managed through apps and digital payment systems, with reduced staff focused exclusively on warehouse management, rather than direct customer interaction. Another growing trend is home pickup and delivery services, with logistics managed either in-house or using external couriers. However, the real Gordian knot to untie is overcoming current commercial and organizational models to approach the sector’s evolution with a perspective and vision free of nearly anachronistic dogmas. Nowadays, visiting a laundry is seen similarly to a trip to a bank, post office, or online supermarket shopping. The obsessive focus on quality at all costs, direct customer interaction, and even a sort of “ownership” over the client are mental frameworks that have been largely outgrown by the “smart” generations entering today’s market. These generations have driven the massive success of digital shopping platforms such as Amazon, Alibaba, Shein, Zalando, etc. It is therefore essential to follow this path of progress, although the high average age of operators in the sector and limited digital/IT skills, along with many other previously mentioned factors, represent significant obstacles that are slowing down this inevitable evolutionary process.

We are currently in the phase of approving the 2025 Budget Law (when the magazine will be published in January, it will already have been approved). From the perspective of your sector, what are the strengths and weaknesses of this economic measure?

Carla Lunardon – Given that the Budget Law aims to ensure a balance between fiscal discipline and economic growth, there are three areas where we hope to see consistent measures: a reduction in the tax burden on individuals and businesses to restore private consumption and investment capacity, strengthening vocational apprenticeship programs, and introducing measures to facilitate access to credit, particularly by modifying the functioning of the Guarantee Fund and with a new law on Consorzi Fidi (Consortium for collective loans guarantee).

Franco Pirocchi – As already highlighted, the sector benefits from a flat-rate accounting system for over 70%, which has eliminated many administrative steps, reduced taxes, and facilitated administrative management. In spite of these facilitations, the sector suffers from the failure to reach the minimum I.S.A. (Synthetic Indicators of Reliability) targets, resulting in an overall insufficient performance (the coefficients recorded are below “six”), so much so that it has been included among those categories suspected of tax evasion (see Il Sole 24 Ore, June 6, 2024). Compared to 2024, the 2025 budget did not introduce any substantial changes to help or boost our sector. On the contrary, it has increased the ability of the financial administration to detect anomalies and noncompliant behavior, thanks to the use of algorithms and artificial intelligence. This could be another cause to shrink our category if tax disputes arise. In fact, in early December, the Revenue Agency notified over 700.000 communications highlighting fiscal issues and inviting taxpayers to join the Biennial Preventive Agreement to compensate for declarations that were not always in line with the minimum standards required. Yet, this tool could really represent a strength and turning point, as it would reduce the risks of tax assessments and audits, although the sector struggles to understand the concrete scope and advantages of this new measure.

Maurizia D’Agostino – The budget law should ensure a balance between growth and fiscal discipline. For a small sector like ours, the impact can only have a positive effect by reducing taxation, the labour tax wedge, supporting business investments, and providing access to credit for smaller businesses. We will make our final considerations once the budget will be definitively approved.

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