Executive Summary

The UK dry cleaning and laundry services industry grew by 6.7% between 2000 and 2004 to generate sales of Ł1.37bn. The main services offered are textile rental, dry cleaning and laundry services to the corporate and consumer markets.

Sales to corporate clients continue to take the largest share of the market, accounting for 62.8% of revenues in 2004. Outsourcing is the established practice for many companies that require textile services, and rent linen and work wear from third parties, which then service and maintain it for the client group. Other products include industrial wipers and dust mats for a range of purposes. The shift in the UK economy from a manufacturing to a service base has been beneficial for this sector, as presentational aspects, such as corporate wear, have gained importance and priority within client companies. Health and safety legislation and requirements have also boosted demand from the manufacturing and process sectors.

The retail market has seen little growth since the start of the new millennium. Falling prices in the clothing market have encouraged consumers to replace rather than maintain, make or mend. Changes in fabric technology have also meant a growing range of machine-washable formal wear, which would previously have been reliant on dry cleaning. However, many consumers still prefer to opt for a professional service. The cliché of the cash rich, time poor society has also led to growing demand for home laundering services and door-to-door operations, which has been one developing area of the market.

The dry cleaning, laundry and textile services market remains very fragmented in terms of supply, with a large number of smaller operators being characteristic. The majority of businesses offer services to a relatively small geographical area, particularly in the retail segment. Those dealing with corporate groups require additional investment in equipment and facilities, therefore cast their nets wider. Nonetheless, in 2004, only a handful of companies generated sales of more than Ł5m per annum. Consolidation is an ongoing process in the sector. Johnsons Group PLC has made considerable progress in developing its position with the acquisition of a number of operations, including the former Sketchley chain in 2004.

Service groups are very exposed to the performance of client markets. Positive trends, such as the upturn in the hotel sector, have led to growing sales and the core market is well established. Outsourcing of these types of services is long established and unlikely to be reversed. The consumer market will be affected by changing textile technology that simplifies home care of clothing. However, other services, such as ironing and laundry services for domestic clients, may provide more positive sales trends.

Key Note anticipates that the market will show positive growth over the short to medium term as client sectors continue to perform well.

Price:	£ 399.00 GBP ex VAT (£ 468.82 GBP inc VAT )
Publication date:	30 Apr 2005
Licence period:	365 days

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