SOUTHERN CALIFORNIA ENTERPRISE : My Multipurpose Launderette : Customers Can Also Shop, Eat, Cash Checks and Watch TV
Bill Cunningham and his partners want to change the image of coin-operated laundries as aging, grim places with stained linoleum, harsh fluorescent lights and nothing to do besides watch the clothes go around.
They have loaded Lucy’s LaundryMart, their second store, with a fast-food restaurant, mini-market, an ice cream stand, three television sets and a check-cashing business, all inside the laundry’s 5,800 square feet of whirling dryers and churning washers.
Cunningham, 34, hopes the mix will spin out profits, attract investors, provide jobs in low-income neighborhoods and build a national chain. “We’re not in the coin laundry business,” insists the athletic Torrance businessman. “We’re in the combined retailing industry.”
The term, coined by Cunningham, describes the idea of putting complementary businesses under one roof. His coin-operated laundries are a version of the one-stop shopping available at supermarkets that have added banks, pharmacies and video rental outlets and in airports that have brought in chain restaurants and retail shops.
Like supermarkets and airports, Cunningham wants to take advantage of a captive audience, mainly women regularly needing to do laundry, with time and maybe spare cash on their hands. Future Lucy’s will have different retail mixes, depending on their neighborhoods, Cunningham said.
That kind of innovation is unusual in the lackluster coin laundry business. Likewise, Lucy’s is the rare self-service laundry to be newly constructed these days, said Brian Wallace, spokesman for the national Coin Laundry Assn.
Coin-operated laundries were a new concept in the 1950s, and by the mid-1980s 40,000 had been built across the United States. Since then, the numbers have dwindled to 35,000, stalling there for the past five years, Wallace said.
Most laundries are 20 to 40 years old, many of them showing their age, he said. The majority are mom-and-pop operations, not generating enough money to pay for on-site attendants. The income stream is steady but not stellar, he added, with profit margins of about 20% on laundries with market values ranging from $50,000 to $1 million.
California, with 3,000 to 4,000 stores, has the most in the nation and also is the toughest market, Wallace said.
But Cunningham said he sees opportunity in the state, particularly in Southern California, where he hopes growth will translate directly into coins tumbling into washers and dryers. Using U.S. Census data and a specially formulated computer program, Cunningham has picked out dense urban areas as prime candidates for his bright, clean and festive Lucy’s.
The formula has already worked in the pilot Lucy’s LaundryMart, which opened in a gang-dominated Lennox neighborhood last year. Although banks turned down financing for what they considered a risky venture, Cunningham found 15 investors who put up a total of $1.3 million to start the business.
The company hired about 30 workers to staff the laundry, many from the neighborhood, Cunningham said. More than 300 people turned out for the laundry opening, and customers still flock to the clean, well-maintained facility, which includes a mini-mart, Cunningham said.
“We clean up blighted areas by putting in needed services, we create jobs and we provide an excellent return for our investors,” he said. “It’s one of those things where everyone comes out a winner.”
He and his partners refined the concept, adding more retail, coming up with a logo and festive red, yellow and blue colors and designing signage that will go in all the stores. They found another 50 investors willing to put up $1.6 million for the second Lucy’s, which opened Saturday at 3rd Street and Normandie Avenue in a dense Latino neighborhood north of Koreatown. Other stores are planned for South-Central, Hollywood and East Los Angeles.
USA Checks Cashed, a San Diego-based chain, approached the company about locating in the laundries, Cunningham said. The ice cream stand is operated by Eskimo Joe’s, a vendor with a Long Beach store.
Although he declined to give financial data for the privately owned company laundries, Cunningham said the first Lucy’s takes in monthly revenue that exceeds $80,000, the average combined income from a separately run convenience mart and a coin laundry.
The idea of putting other retail services inside laundries to boost income is not new. Duds ‘n Suds, an Iowa company, added beer and pool tables to its laundries and Clean & Lean, a northern San Diego County chain, installed fitness equipment. Although individual laundries carrying those names still exist, both corporations ended up in bankruptcy later. Those affiliated with the former chains say the laundries were unable to deal with the complexities and costs of franchising.
Currently, Clean-X-Press, a San Francisco-based company, is combining dry cleaners and laundries in another attempt at multiple uses. But such efforts exist in only about 1% of all laundries nationwide, Wallace said. “It’s a simple business, a hands-on business and very localized,” he added. “But we’re seeing a trend toward multiple-store ownership.”
For Cunningham, who wants to be the first to establish a nationwide chain, the laundry business is almost a second home. Growing up with 12 brothers and sisters in the South Bay, Cunningham said his mother’s washer and dryer were constantly operating.
Years later, after nine years developing and building coin laundries for Launderland, he started his own business with his brother Andrew and partners Elliott Cody and Randy Landsberger. But instead of continuing to sell the laundries, the company decided to own them.
Cunningham said he and his brother looked to their family experience to come up with a name, that of a maid who had helped their mother wash clothes. Recalled Cunningham, “She said if she’d had a quarter for every wash she’d done, she would be a millionaire.”
