James Jang’s dry cleaning store, Royal Cleaners, used to operate six days a week, ten hours a day, in Manhattan’s Union Square. He took charge of the business when his brother had an aneurysm in 2009, barely a year after the lease was signed. Jang was 34 years old then, working as a project manager at a commercial electrical company and quickly found himself picking up the pieces of a company with endless costs: mounting city fees and real estate taxes, as well as day-to-day expenses like eco-friendly solvents, plastic bags, and tags. Jang’s store was a “plant, ” meaning he did all his cleaning on site, as opposed to a “drop shop,” or storefronts where garments are simply tagged, spot cleaned, or tailored but sent to specialized warehouses to be cleaned.
Jang, now 44, initially planned to sell the business immediately and get out with what he could. Dry-cleaning “was something I never had any experience in,” he said, but the economic downturn made selling impossible. So Jang decided to rework the business, increase revenue, and sell it later on.
So when dry-cleaner startups like FlyCleaners and Cleanly, which launched with $2 million and $5 million in funding, respectively, approached him to do wholesale services — cleaning large volumes of garments at a lower cost — Jang was tempted. His shop’s central location could easily become a boon for such startups and potentially turn him a quick profit, but he ultimately declined to work with them. The added volume would stretch the work weeks even longer — forcing him to pinch pennies to save on solvent, plastic bags, and labor. And Jang felt the way startups churn out dry cleaning ran counter to how he believes customers should be treated. “If you don’t take care of your customers and you’re just about the money, I don’t want to talk to you,” he said.
For Jang and many other Korean-Americans in the dry-cleaning industry, who have owned the majority of these businesses since the 1970s, these startups are an existential threat, dramatically changing the nature of the dry-cleaning business without improving it in a meaningful way.
“Wholesale was something my brother did and I cut it out because one, it affects our turnaround time, it affects the way we take care of our customers,” he said. “The margin was pretty slim with retail customers, but when you do wholesale, you just spread that out on something losing.”
Dry cleaning is a service ripe for disruption. Like many shop owners, Jang is aware of the inconvenience of dropping off and picking up laundry. The appeal of a dry-cleaning service at your fingertips is tantalizing, especially for millennials driven by an on-demand culture. The annoying time spent fulfilling such a mundane task would be better spent elsewhere, as startups like FlyCleaners, Rinse, and Cleanly have come to reiterate through their marketing. “On-demand pick-up and delivery service in as little as 20 minutes,” one advertisement reads. “We’re a laundry and dry cleaning service that delivers at the tap of the button — so you can get back to doing what you really love,” another says. All these services, to varying degrees, follow more or less the same formula: you schedule a pickup time that works best for you, the company arrives in the allotted time to take your garments, and your newly dry cleaned items are dropped off at your doorstep at a time most convenient for you.
In 2014, New York Magazine documented what it called the “laundry-app race.” There was DashLocker, which offered locker kiosks for customers to deposit their clothes whenever; once a customer dropped off their items, DashLocker would be notified to pick up, clean, and return the items to the appropriate lockers. And then there were Spotless City and Brinkmat, both e-commerce platforms that handled orders and scheduled services on behalf of dry cleaners in customers’ surrounding areas. None of these startups did their own cleaning; instead, they outsourced their garments to existing factories or retail stores with on-site machinery, like Jang’s.
The Korean-American Dry Cleaners’ Association of New York estimated that there were 3,000 dry cleaners statewide in 2016, with 80 percent of them Korean-owned. Sok Kun Chun, the former president of the association, said there’s been a steady decline in Korean-owned dry cleaning businesses since 2008. When he was president of the association 10 years ago, there were about 2,000 Korean-American dry cleaners in New York City. As recently as 2017, there were an estimated 2,700 dry cleaners statewide, 1,400 of which were owned by Korean-Americans.
Sang Seok Park, another former president of the association, said that 900 Korean-American dry cleaners have closed in the past five years (neither the association nor the city tracks the breakdown of dry-cleaner ownership between different Asian minorities). “As you know, in America, small business is going down, and big business is going up,” he told me. “All the prices [are] high, but dry-clean prices stay — that is the No. 1 problem.”
Like many Korean immigrants who moved to the U.S. in the ’80s, Hyun Sook Song and her husband bought a drop shop in Bushwick for various reasons. Drop shops tend to be easier to run (no need to operate the dry-cleaning machines) and cost less to buy (she bought hers at half the gross income, paying half of how much the shop made before she deducted taxes or expenses) and maintain than plants. And since drop shops are typically closed on Sundays, she and her husband could also attend church.
As a family business, the dry cleaner was less time-consuming and physically demanding compared to other popular Korean retail shops such as produce and fish. Korean immigrants bought up dry cleaners from predominantly Jewish and Italian-American owners; by the ’80s, they successfully dominated the business. This trend continued into the ’90s, when Korean immigration was at its highest.
Despite more than 15 years of experience and a loyal customer base, Song fears that raising prices will cause customers to take their business elsewhere. The rise of fast fashion and athleisure means that dry cleaning a garment can equal or surpass the cost of replacing it. Because drop shops like Song’s are serviced by wholesalers, the businesses split the cost 50-50, according to Ann Hargrove, the director of events and special projects at the National Cleaners’ Association. So for every coat Song cleans at $18, she makes a $9 profit. Running a drop shop can be expensive. The rent for brick-and-mortar storefronts can range anywhere from $70,000 to $275,000 annually. When a wholesale cleaner accidentally damages a garment, or a customer is dissatisfied, there’s liability insurance (a must for an industry that typically only gets customer feedback when something has gone wrong), which can cost $300 a month.
Plants like Jang’s, on the other hand, incur even more significant costs. Hargrove said that opening a plant can cost at least $175,000. And because of constant upkeep and nonstop city regulations, it’s no wonder that Hargrove jokingly said that New York City is “the worst place to own a plant.” She also said that industry downturn in the last five years has pushed dry cleaners, both plants and drop shops, to branch out into cleaning Ugg boots, wedding gowns, rugs, and more high-ticket items like evening gowns and prom dresses.
Dan Kim, the manager of Koreatown-based London Bright Cleaners, feels the pressure to maintain low prices despite mounting costs, and seeks to offset those costs by sheer volume. He moved to New York in 1993 as an international student majoring in theology, and went on to become a supervising pastor before moving into dry cleaning. In his shop, the cost of cleaning a shirt has risen $1.48 since 2005. “You know why we cannot raise? Because the wholesaler still cleans shirts to retail shop under a dollar,” he said. “We say it’s $3.20 and they go crazy.”
Kim’s business has grown the old-fashioned way, by word-of-mouth; he said that cultivating relationships with local residential doormen is vital. “[Walk]-in customer for me is maybe around 20 percent [of business],” he said. “Most of our business is pick[ed] up from the concierge.” And these relationships can take decades to build. “We take care of them, like free dry cleaning for the supers, and then we try to give them a good deal for uniforms. It’s not gonna happen just one night, one day — it’s a long time.”
When Jang got to his brother’s shop, the work overwhelmed him. “It was very disorganized and the quality was just terrible. Customers were upset,” he said. He was very much on his own, but saw the situation as an opportunity to learn and rebuild from the ground up, which meant overseeing managerial duties like scheduling counterpeople and maintaining the washers without earning much of an income. It took nearly eight years until he was out of the red, but he still found it hard to turn a consistent profit. “It was probably word of mouth from customers... But it was hard to put in 80 hours, sometimes 90 hours,” he said.
Straddling first and second generations of Korean immigrants, Jang has also been more willing to chat with his customers for a more personalized experience, a stark contrast to the more tight-lipped Korean-American dry-cleaning store owners who spent their formative years in poverty-stricken Korea. He’s happy to strike up a conversation to inform customers that dry cleaning isn’t the only option, nor the best for a particular garment. Jang’s acute understanding of customer habits, paired with his gregarious demeanor, helped him cultivate a solid clientele, ultimately attracted the attention of another owner interested in acquiring his loyal customer base. A handwritten note under the real-estate sign at the empty storefront now directs his former customers down two avenues to another retailer, Tower Cleaners.
Tower Cleaners is owned by a man who identified himself as Mr. Lee, who says he is also the founder of the Manhattan-based franchise J’s Cleaners and DC Care Center, large players in the dry-cleaning industry. He acquired his first storefront in 1985, according to Joseph Lee, his eldest son and business partner. And after 10 years of building out his business and buying up storefronts, Mr. Lee decided to centralize his dry-cleaning facility so all his franchises could be serviced at one location for more consistent quality. After the younger Lee graduated from Rutgers, he knew he’d take over his dad’s business. “I’m the eldest son. In Korean [culture], it’s the obligation. What am I gonna say? No? He’s my father, he needs help,” he said.
But ever since he joined the family business in 2008, he’s seen how startups have radically changed the dry-cleaning landscape. Competing with startups less concerned with day-to-day production aspects and more with sleek marketing and bountiful promo codes can be a hard blow to take for shop owners who have spent years gaining a foothold in the market. “They just want to be the Uber of everything — Uber contracts everything to drivers, but Uber is not a production company,” the younger Lee said. “Cleaning is a service. You can’t mass-produce service, especially with cleaning. There’s no standardized thing you can just put on a production line and do it, you know. All clothes [are] not created equal.”
Jang and Lee both said that startups are claiming to fix problems they don’t fully understand. Production disruptions, delivery delays due to traffic, and issues with older techniques like drying drums and spot treatment — something that is still performed by hand — cannot be done with an app.
Disruption, as if exhausted from true innovation, has now become shorthand for streamlining mundane nuisances, and it shows. Of all the New York-based apps mentioned earlier, only FlyCleaners and Cleanly have survived independently. DashLocker and Spotless City have both shuttered, and Brinkmat was acquired by Delivery.com.
“They don’t have to make money,” Jang said. “They wanna be the next Uber, they wanna be the next Amazon and run red, and gain market share and kill everybody else, but they have no experience in production.”
A quick Yelp search supports Jang’s contention that the quality of service these startups provide leaves much to be desired. Out of more than 700 reviews, roughly 85 percent gave FlyCleaners one star. Even as recently as of September 10, 2019, Eli E. warned customers to stay away: “They were very reliable for the first few years — laundry was always cleaned right, pickup and delivery always on time... No longer. Customer service is nonexistent — their number no longer works. When you call it, it tells you to call the local provider listed in the app. You call the provider and if you're lucky you might be able to reach someone who picks up the phone. My laundry never showed up. I waited all evening.”
The amount of clothes FlyCleaners has lost or damaged is certainly notable as a 2016 Business Insider article found. The business currently has 109 customer complaints on file at the Better Business Bureau, and earlier this year, they announced the closure of their Long Island City plant, laying off 116 employees. (FlyCleaners did not respond to requests for comment.)
Even though Jang’s storefront may have shuttered, he agreed to stay on as a consultant at its “new” location — a familiar face at the counter until the transition became finalized. The sign directing customers from Jang’s old shop to Tower Cleaners has been taken down; now his storefront sits empty right next door to the hungry droves waiting for a table at Tim Ho Wan. The stripped floor and bare walls bear no trace of the dry-cleaning machines that once used to turn hundreds and hundreds of pounds of clothing per day.