Young Laundry
merging to survive

The 103-year-old Oahu chain will
join with a mainland firm but
will retain its name and workers

A new fit Longtime Hawaii company Young Laundry and Drycleaning is merging with mainland-based U.S. Dry Cleaning Corp. Founded: 1902 Origin: The in-house laundry for the Alexander Young Hotel on Alakea and King streets Employees: 130 Oahu locations: 14 Merger effective date: Aug. 1

Hawaii's first commercial laundry, Young Laundry and Drycleaning, announced plans yesterday to merge with mainland-operated U.S. Dry Cleaning Corp. in a move to preserve the 103-year-old local company.

Young Laundry, established in 1902 as the in-house laundry for the Alexander Young Hotel on Alakea and King streets, has 14 locations on Oahu. The company has signed a letter of intent to become a wholly owned subsidiary of U.S. Dry Cleaning, but would continue to do business in Hawaii under the Young Laundry name.

"This merger will give the company access to resources that will allow us to renew ourselves and will give me the opportunity to be involved with something bigger," said Mike Drace, president and chief executive of Young Laundry. He will serve as chief operating officer of U.S. Dry Cleaning after the merger becomes effective on Aug. 1.

U.S. Dry Cleaning, which has operations in Nevada and California, is planning more expansion in Hawaii and throughout the West Coast, Drace said. Young Laundry has 130 employees in Hawaii and all will be retained, according to Drace.

Gwen Underwood, a store manager who has worked for Young Laundry for the past 24 years, said employees are excited by the merger and glad that the company will keep the name that longtime Hawaii customers recognize.

"We feel good about the merger and the way that it was presented: It feels like job security," Underwood said. "Being able to have a better opportunity to open new stores will benefit customers and employees."

Young Laundry has a battery of loyal customers who rely on the company's reputation for good service, said Pam Chambers, a local presentation coach who is a customer.

"They deliver the kind of service that you expect but that you don't often get," Chambers said.

"There was nothing laid-back about dressing for success 100 years ago. ... Can you imagine the requests they must have had?" Chambers said. "With the lack of air-conditioned offices and the unpaved roads, those garments must have been a nightmare to clean compared to the simplicity of today's aloha shirts and khakis."

The merger with U.S. Dry Cleaning will bring more cash and greater buying power to Young Laundry, which in recent years has had to cope with Hawaii's fluctuating economy, Drace said.

"Before 9/11, we were cleaning about 3,000 uniforms a day. After 9/11, the number dropped to about 1,000 a day," he said. "Those people were not working, and the impact trickled down."

In the last 18 months, Young Laundry has felt an improvement in the economy, Drace said, and the merger will help the company hold its position. Young Laundry has done surveys that show it is the best-known laundry brand in Hawaii, he said.

"This is a highly competitive industry with very low profit margins, because it is so labor-intensive," he said. The low retail prices of some foreign-made garments have put pressure on dry cleaners to cut their prices.

Yet the cost of doing business in Hawaii is getting more expensive, with increased health care costs and higher rents, Drace said.

"The merger may help us hold the line on full-service pricing," he said. "We'll have to find ways to handle more pieces per person."