Puritan Cleaners, the Richmond region’s largest dry cleaning operator, is buying a smaller yet well-known competitor.
Puritan is acquiring HandCraft Cleaners’ retail operations and home delivery service. The Nichols family, which helped start HandCraft Cleaners in 1970, will keep its rapidly expanding laundry services business to hospitals and medical offices. The deal, announced Thursday, should be completed later this month. Terms were not disclosed.
“Volume is king and being a bigger powerhouse will get us a little synergy going forward,” said Gary Glover, owner of Puritan Cleaners and the third generation of his family to be in the dry cleaning business that started in 1937.
“We would love to have more volume,” he said. “We can add their customers easily. This is a great deal and is mutually beneficial for both of us.”
Puritan, which currently has 13 area locations, will take over the HandCraft Cleaners’ location at 5705 Patterson Ave. in Richmond’s West End. The HandCraft location at 2733 McRae Road in the Bon Air area of Chesterfield County eventually will close because Puritan has nearby locations.
Jay Nichols, president of HandCraft Cleaners, said he and his brothers — Keith and Jeff — have been downsizing the retail dry cleaning side of the family business for the past several years. At its peak in the 1980s, the company had 16 area locations.
Their father started a dry cleaning business in 1956 and then merged his business with HandCraft Cleaners in 1970.
“It was a hard thing to back away from,” Jay Nichols said about the family selling its retail business. “But it was the right time. Dry cleaning is an industry that has gotten beaten up pretty hard in the last 30 years.”
HandCraft had approached Puritan’s owner a couple of times over the past several years about buying the business. “The time just never seemed right for us until now,” Glover said.
Another factor for the Nichols family to sell was that none of Jay Nichols’ children or his brothers’ children are interested in working in the retail business. “We certainly tried to get the kids interested in that business. We made the decision that if we didn’t have a Nichols running the thing, we were not going to go out and get an outsider.”
Meanwhile, the Nichols family, including the third generation members, has shifted its business operations more into providing laundry services to hospitals and medical offices in seven states in the Mid-Atlantic and the Southeast.
Their Richmond-based HandCraft Services Co. processes more than 74 million pounds of linen annually for more than 65 hospitals and 1,000 medical practices.
HandCraft Services operates a 60,000-square-foot laundry processing facility, which opened in 2008, on Coffer Road in South Richmond. It bought a 147,000-square-foot building across the street in 2014 and is using 75,000 square feet for its operations.
The company also operates a plant in High Point, N.C., and is getting ready to open a facility in Wilson, N.C., this fall. It also has linen depots.
HandCraft’s retail dry cleaning business generated a little more 2% of total revenue of the family’s businesses, which includes its growing real estate portfolio, Nichols said. (The family owns the HandCraft Cleaners building in Scott’s Addition that has been converted into a multitenant commercial space, and it added on a two-story office building next to its Patterson Avenue store.)
“For all the energy that you have to put out, it just wasn’t worth it anymore,” Nichols said about the retail business.
But for Puritan Cleaners, it will enable that company to add new customers and business, Glover said.
Before the acquisition, Puritan was larger than the combined sales of the next 40 area competitors, including HandCraft, Glover said.
The coronavirus has hurt revenue at dry cleaning businesses, including Puritan and Handcraft.
Revenue at Puritan fell 80% in April compared with the year-ago period, Glover said. Sales in July and August are down about 40% to 45%, he said.
At HandCraft, revenue dropped 66% in May compared with a year ago and now the business is now off by about 30%, Nichols said.
Puritan Cleaners, known for collecting and cleaning thousands of coats for The Salvation Army’s Coats for Kids program, had about 190 employees at its 13 stores, delivery operations and three dry cleaning plants before the pandemic hit.
Glover kept them all on using a loan from the federal government’s Paycheck Protection Program. But when that ended, he said he had to let 70 workers go and temporarily close two of his three dry cleaning plants.
He has added back about 10 employees since then, and now hopes to be able to add another 10 to 15 workers and reopen a second plant once the HandCraft deal is completed. In addition, he expects to keep many of HandCraft’s 38 employees — and could possibly add more HandCraft workers on later.