Dry cleaning seems like a straightforward enough business to operate, and it can be.
But with the right technology and sharp management, there is room to grow beyond the basic cleaning of shirts, suits and dresses.
Since acquiring Parkway Cleaners in Washington nearly two decades ago, Jon Simon has employed computer smarts and state-of-the-art equipment to expand the business beyond its core 3,000 customers and double its revenue by cultivating a specialty in historic and priceless artifacts.
His company has handled everything from White House drapes to decades-old sports uniforms to the elaborate tapestries that grace Embassy Row. Parkway has cleaned a quilt sewn by a former first lady and the flag adorning the booth at Ford’s Theatre, where Abraham Lincoln was assassinated.
Situated within the 10,000 square feet of his new headquarters in North Bethesda is a climate-controlled fur storage vault, an ozone room for smoke and odor removal, and one corner dedicated to cleaning elaborate window drapes and blinds.
“My bread and butter is ‘Mr. and Mrs. Working Homeowner,’?” he said. “But we have a lot of other ways to serve customers and make money.”
About 75percent of his business is based on routine pickups and deliveries to those 3,000 core customers by three full-time drivers. The rest of his comes from walk-ins with special requests such as a treasured bridal gown or antique Oriental rug.
The business has two full-time seamstresses who replace buttons, patch tears or do full alterations.
Parkway’s marketing targets upscale neighborhoods such as Chevy Chase, McLean and Potomac, where clients demand — and are willing to pay for — customized treatment for their belongings.
“If I see a house that sells for over $1.5 million, we would mail them a coupon and say we would love to be your dry cleaner,” Simon said. “If they can afford a $1million house, they probably dress well.”
Simon uses bar codes to chronicle his customers’ preferences, such as whether they want their sweater draped over a hanger or a crease in their pants. “It’s a labor-intensive business.”
Parkway relies on a crew of skilled longtime employees to deliver specialized service. “We spot and hand-clean garments before we insert it into the dry-cleaning machine,” he said. “Most cleaners don’t do that.”
That kind of detail isn’t cheap. A laundered shirt that may cost 99 cents to clean at a competitor starts around $4 at Parkway. The average order, which can include multiple items, is around $35. All told, Simon’s troops clean more than 100,000 pieces a year.
Higher volume at higher prices helped propel Parkway to nearly $4million a year in revenue and a mid-six-figure income for its owner before the coronavirus pandemic hit. Simon said most dry cleaners consider $1million in sales a very good year, but many finish at half that number.
His 25 employees account half of his costs. The rest is rent and utilities, then insurance, marketing and other costs. His operation also has five vehicles.
When the lockdowns hit in March, revenue tumbled by about two-thirds before climbing back. The company finished the year with about $3million in revenue, roughly breaking even.
“Weddings, proms, dinners and regular workplace suits and dresses came to a hard stop,” Simon said. “Almost nobody is wearing many, if any, clothes that require dry cleaning. There are no large gatherings. There have been no gala fundraisers and balls. And of course no inaugural parties and events.”
Simon’s experience in manufacturing came into play during the pandemic when he re-engineered his factory floor, reassigning his seamstresses to make masks for coronavirus protection.
“We got into making hand-sewn masks before the major manufacturers and overseas suppliers could catch up,” he said.
The federal government helped him weather the downturn with $250,000 from its Payroll Protection Program. Simon applied for another $250,000 in the next round of relief.
Simon, who has an engineering degree from the University of Michigan and a master’s degree from Harvard Business School, calls dry cleaning “the most challenging industry I have been involved in.”
It is a canvas for his computer skills and wonky management ideas. During one tour, he proudly pointed to his desktop computer, where he can track his drivers at any given moment, knowing how many deliveries they have made and how many remain.
He is at the store every day, often until late in the evening.
“My holy grail is management by wandering around,” he said. “An absentee owner in this business is a recipe for failure or at best mediocrity.”
Paying close attention to detail has helped reduce the number of mistakes from 5percent to well below 1percent, he said. By cutting down on mistakes and ruined clothes, his insurance costs dropped.
To improve quality, Simon recently invested $50,000 to upgrade the computer system and install newer cleaning equipment.
“The investment can impact your cash flow short term, but in the long run this pays off in being able to charge more and retain employees,” Simon said. More than half of his 25 employees have been with him in the 20 years he has owned the business,
Simon was forced to move from his longtime Connecticut Avenue headquarters to his new North Bethesda location because his landlord wanted to develop the property.
Simon spent several million dollars on the move, including $1million for new equipment and outfitting the factory’s utility infrastructure.
“I financed it, but I went deep into my own pockets, too,” Simon said.
Simon grew up in Rochester, N.Y., where his grandfather founded a company that invented and manufactured plastic crystals typically found on wristwatches.
He intended to become a musician but decided on engineering by the time he graduated Michigan in 1978.
“I always knew I would get a business degree.”
He pursued his MBA immediately afterward, which is unusual because most graduate business schools prefer candidates who have real-world experience.
“I had worked at the family factory and at places like Chrysler during college, so I think Harvard thought I had enough work experience,” he said.
Simon wanted to strike out on his own and bounced between jobs, including a real estate title company, his own heating and air conditioning firm, a couple of Internet start-ups and computer programming.
He wanted to be his own boss, so he hired a business broker to find him a company he could buy so he could put his own ideas to work.
“I told the broker, ‘No restaurants and no retail,’?” Simon said. “I wanted something with a unique position in the marketplace, something with a proprietary product or service.”
When the broker pitched Parkway, a Washington-area institution founded in 1926, Simon nearly hung up the phone.
“He convinced me to at least look at this cleaners,” Simon recalled. “He told me it wasn’t your typical dry cleaner.”
Simon paid a visit and thought the dry cleaner was ripe for innovation.
“After looking and digging in and feeling comfortable with this business having run the manufacturing part of our family business, I dove in”
And he’s glad he did.