The Troubles of Coin-Ops

Potential investors poured into the convention of the National Institute of Dry-cleaning two years ago, clamoring to find out about a new "wonder business" that was virtually guaranteed to coin profits while they went fishing. Last week in Washington, the institute met again, and this time it was hard to hear a good word said for the business of coin-operated dry cleaning shops. In the two years between the two gatherings, the coin-op industry blossomed into a $120 million-a-year business with 7,300 shops across the U.S. But coin-ops have made more owners miserable than millionaires.

Not for Amateurs. Coin-operated dry-cleaning machines look and operate much like coin-operated laundry machines.

Promising to clean an 8-lb. load of clothes for $1.50 to $2, they were expected to be just as successful. The Norge division of Chicago's Borg Warner Corp. got into the market early and now has 50% of it. Soon 32 other firms followed--including G.M.'s Frigidaire, Whirlpool, Westinghouse, Philco--and the competition was on. Most of the machines were sold not to established and experienced drycleaners, but to investors who swallowed the high-powered promises of "profits while you sleep." Hard-talking salesmen urged investors to take out 90% loans on equipment worth up to $100,000. Many cities were quickly swamped with coin-ops; Denver at one point had 1,800 machines vying for business that 500 could have handled.

Drycleaning even by machine turned out to be no business for beginners. The plumbers, insurancemen, and merchants who set up shops found that almost every fabric posed a different cleaning problem and that customers expected them to take out spots and stains just like the more expensive professionals, whose drycleaning process takes 14 separate steps. Coin-op cleaning proved to be better suited for such bulky items as blankets and draperies than for men's suits and outerwear. Fulltime attendants (often required by local laws) sent up labor costs. Electric bills were high, and machines frequently proved unreliable. Clothes often came out smelling like sulphur. Many began to echo the wry dismay of Irwin Gott, a Houston jeweler-turned-drycleaner: "I didn't intend this to be a nonprofit corporation; it just turned out that way."

Little Extras. When coin-ops first started, the talk was that they would soon put professional drycleaners out of business. Something quite different is happening. To attract customers, the successful coin-ops have had to expand their operations into spotting, pressing and other services, thus are becoming somewhat professional themselves. Many professionals, having lost some business to the coin-ops, have turned to selling coin-op-type service as a sideline, for cleaning materials from around the house and old clothes that do not need pressing. The general feeling at last week's convention was that there is a continuing place for coin-ops, but that the most successful will probably be managed by professional cleaners in big operations that put coin laundry and coin drycleaning under the same roof with a full line of professional drycleaning.

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