SPOTLIGHT ON NORTH AMERICA
In regard to future market prospects, Kannegiesser anticipates growth in the demand for laundry and drycleaning services in North America due to increased hygiene awareness and sector growth. The Kannegiesser spokesman continues: “Additionally, the US healthcare sector is moving towards increasing the use of hygienically clean reusable PPE instead of disposable textiles, which improves environmental sustainability and supply- chain resiliency to protect frontline healthcare workers and patients. We are confident that our washing, extraction, and drying equipment provides our customers with the tools to meet and exceed hygienic standards and increase the life cycle of healthcare providers’ supply of personal protective equipment.”
As for major challenges, according to the company, they include labour shortages and rising operational costs. Kannegiesser ETECH in the USA is committed to addressing these challenges with is SMART laundry solutions and dedicated support. The North American market has always been important for another major German laundry and drycleaning operator, Kreussler Inc.
As Richard Fitzpatrick, Kreussler Inc. vice president tells LCNi: “2024 marked the fourth consecutive year of substantial growth for Kreussler Inc. in North America, with annual revenue up more than 50% since the pre-COVID economy.” To sustain this growth, he says, Kreussler continues to expand its skilled technical support staff, including the addition of five new technical sales representatives in 2024. At the same Fitzpatrick expects the company may face tough times in the North American market in years to come. Fitzpatrick elaborates: “Drycleaning has and will continue to decline in the North
American market. Consumer trends and the requirement for professional textile care are driving this decline. We continue to measure reductions in the number of garments taken into a PTC provider and the overall decrease of providers in every market. Many providers are trying to replace this lost revenue by expanding their offerings into traditional home laundry service, household bedding, linens, and personal garments. Home laundry tends to be labour-intensive with low margins, and for detergent manufacturers, not always the best fit for our products and solutions.” Fitzpatrick adds the company is comfortable with its market position in professional textile care yet it is paying attention to the ever-growing importance of commercial laundry, for example, in the travel, hospitality and service sectors, as more people look to leave their homes and increase social activities in travel and leisure.
Fitzpatrick continues: “Currently, concerns about the economic and trade policies in the United States are slowing the markets. The extent and magnitude of this impact are unknown, but lessons learned from the pandemic and our overall focus on long-term goals will provide stability as we navigate the short-term effects.” As for the effect on tariffs on the US itself, looking for enlightenment on what all this could mean to the US textile care industry, LCNi approached Joe Ricci, president and CEO of TRSA, the professional trade association for textile rental businesses across North America, covering not only the USA but also Canada and Mexico. He said: “TRSA represents the $50 billion linen, uniform and facility services industry, which employs 200,000+ people at 2,500+ facilities in North America. “A significant portion of linens and textiles in the United States are imported. Tariffs directly increase the cost of imported goods. For the linen and uniform rental industry, this means higher prices for imported linens and uniforms. In 2021, the US imported textiles and apparel worth approximately $144.6 billion,” said Ricci. “The majority of these imports come from overseas countries impacted by these tariffs. Overall, more than 98% of retail clothing sold in the United States is imported.”
US HQ: Jensen USA’s headquarters in Panama City, Florida
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“In addition to impacting textiles,” continued Ricci, “the tariffs will impact our equipment manufacturers, chemical suppliers and other essential products
and services that require components not available in the US. These increased costs lead directly to higher prices for consumers and reduced profit margins for businesses along with other factors have also created a very high level of uncertainty that is just bad for business. Prices for domestically manufactured products will also increase due to greater demand.
“Whether these or other tariffs are implemented or just threatened to be implemented, economic uncertainty is causing companies to pause plans for growth forcing companies to hold back, directly impacting job creation. Even the threat of tariffs will also create supply chain delays and disruptions. Businesses will need to consider their sourcing strategies. While the United States would like more things made here, because that’s good for the economy, that’s good for jobs, new tariffs will drive up the cost of actually making those things here in the United States. “The key to having a thriving US economy is having US companies that are investing and becoming more productive. And we can’t do that because we’re uncertain about immigration, tax and trade environment.
Meanwhile, Luci Ward, executive director, Textile Care Allied Trades Association (TCATA), which on 8 March held a useful webinar on tariffs, said: “Tariffs on imported goods have the potential to significantly disrupt the commercial laundry and drycleaning industry. With rising costs for essential equipment, chemicals, and supplies, businesses are faced with the challenge of balancing increased expenses while maintaining service quality and affordability for their customers. The ripple effect could ultimately impact not just manufacturers and distributors, but also the broader supply chain and the communities they serve.”
Directly after so-called Liberation Day back ijn March, Kyle E Nesbit, Southwest Drycleaner Association (SDA) president and Dry Cleaning and Laundry Institute International (DLI) chairman, told LCNi: “I know Tariff 232 Steel had already shot hanger prices from Mexico +17% and from China +24%.” It caused DLI members to pass on a price hike to the consumer of 2%. It is the uncertainly and confusion, as much as the tariffs themselves, that are negatively impacting business and slowing potential growth, new hires, expansion and more.
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