An Interview with “Wash with Wally” Columnist Wally Makowsky
To say that Wally Makowsky is a successful laundry supplier to the Chicago area market would be accurate – but it would be missing the point. Of course, Makowsky is also the author of PlanetLaundry’s popular, long-running stain removal question-and-answer column, “Wash with Wally.” Each month, he uses his high-profile platform to positively influence the business practices of the magazine’s many readers – laundry owners and potential investors alike.
And, although Makowsky’s back-page column is the reason many laundry owners read PlanetLaundry from back to front, his local influence goes well beyond the printed page. In fact, many store operators in the Chicagoland market won’t make a major business move without first seeking Makowsky’s input.
Wally recently sat down with PlanetLaundry Editor Bob Nieman to discuss his life in the laundry industry – how he first got into the business, how it has changed over the years and what today operators can expect in the future.
Since I became editor of PlanetLaundry, you and I have shared lunch together on a monthly basis for nearly 13 years, under the guise of “working on your column.” As a result, I know bits and pieces of your life history, but by no means all of it. So, if you’ll indulge me, let’s start from the start…
I was born in the Ukraine at a time when hatred and insanity ruled the world. It was 1941 – the height of World War II.
When I was 2 years old, the Nazis captured the town in which my family lived. They put us in a cattle car and shipped us out to the infamous Dachau concentration camp – despite the fact that we weren’t even Jewish. We looked Jewish, I guess.
From Dachau, we were taken to another concentration camp in Bavaria and picked up for slave labor, ending up on a farm outside of Frankfurt. In those times, luck was often the difference between life and death – and we got very lucky.
The farmer turned out to be a great guy, and the Allies weren’t interested in bombing farms. So, we always had food and, more importantly, we survived. When the war ended, we came to the United States and settled in Chicago.
How did you first get involved with the laundry industry?
In 1960, I was attending Wright Junior College in Chicago, and I applied for a part-time job driving a small delivery truck for a company called LNS Distributors, which was a soap and detergent supplier for area coin laundries. In fact, it was one of the first packaged laundry detergent distributors for coin laundries in Chicago and the outlying area.
The owner was a man named Carl Carlson. He was an interesting guy, a former sales manager for General Motors for 27 years. However, he had developed a drinking problem and was let go from GM – so LNS was in many ways going to be his comeback in the business world.
When he hired me, there was only one other employee on staff. I would drive the truck after school, so Carl gave me the keys to the office and the warehouse, because sometimes I would work until 9:00 at night, after the office had closed. I would do the loading and offloading, and I kept my own time card.
After about a year with the company, I noticed that business wasn’t doing so well, and I had really grown to like Carl. As a result, because I was a young guy who didn’t need much money and because I kept my own timecard, I began taking six or seven hours off of my timecard each week, just to help out the company financially.
Then, one day, the old man called me into his office. He said, “Wally, I don’t like what you’re doing.”
Of course, the first thought that entered my mind was that he was going to accuse me of stealing something. After all, I had the keys to the company.
“Carl, I don’t know what it is you don’t like about what I’m doing,” I replied.
“You know what you’re doing,” he barked back.
At this point, he opened his desk drawer and pulled out a stock certificate for 1,000 shares of LNS stock and handed it to me, essentially making me a 10 percent owner of the company.
“I know you’re cheating yourself on your timecard,” he continued, his voice softening. “I really appreciate it, but I don’t like it. So stop it.”
With that, he sent me out of his office, with my head spinning – I was now a 20-year-old kid with 1,000 shares of company stock.
I continued to work part-time at LNS until I graduated – after which I was drafted into the Army, since it was the early days of the Vietnam era. I remember telling Carl when I received my draft notice, and all he said was, “I just want to make sure you come back.”
After my military stint, I returned to LNS; however, by this time, Carl had developed a heart condition, so he was in and out of the hospital. But I picked up the slack. I was now active full-time, and I was handling more of the sales and service, and doing less deliveries.
During this time, I developed the concept that, if customers bought products from us, the service on the vending would be free – and we picked up a lot of new business this way. In fact, we took a business that was doing about $200,000 in sales a year up to more than $1 million a year in a matter of two years.
Sadly, just as the business was taking off, Carl passed away – but not before seeing the business he established grow into a bona fide success.
Carl left the business to me and his son. The problem was that his son simply couldn’t deal with small-business owners. Working in the company frustrated him and, in 1967, he ended up selling me his stake in the business.
You were 26 years old and now the sole owner of the business you worked for part-time after school.
That’s right. I had four employees, and we were doing a little over $1 million a year. At that point, I bought a larger building at the corner of Addison and Milwaukee in Chicago. I also hired some salespeople and expanded into commercial laundry and drycleaning supplies, as well as those for the coin laundry business.
I grew the business to $6 million a year. In fact, I was the largest P&G distributor in the country for a 15-year run.
How would you best describe those early days, especially within the self-service laundry industry?
When I first got involved with the coin laundry business in 1960, the average laundry was less than 1,000 square feet, with a concrete floor and 50-pound dryers. Generally, it was a mix of about 18 washers and maybe seven or eight dryers.
The dominant machine in the Chicagoland area was an eight-pound Westinghouse washer, which was priced at 25 cents. The 50-pound dryers were priced at a dime.
The stores were probably the most profitable at that time, with the average profit margin at approximately 80 percent. Utility costs were negligible, and the only large expense was the rent. Plus, all of the laundries were unattended.
Going through the years, the real boom in the construction of laundromats in Chicago came between 1966 and 1976. There were more than 1,000 laundries built during that time.
Also, laundry distributors became more sophisticated. They started building larger stores, with paneled walls, tiled floors and quality lighting. That model dominated the laundry business nationwide.
At that time, the Chicago area was building the best laundries in the country. We had distributors here using architects and interior designers to help build laundromats. People came from all across the U.S. to see the stores in the Chicagoland area.
Most of the stores that were built were out in the suburbs at first, because there was access to parking in the strip centers. Those became the more profitable stores, while the city laundromats were built in neighborhoods and were strictly walk-up type businesses.
By the 1970s, there was a falling out, primarily in the suburbs. With the new homes going up at the time, washers and dryers were now being included, so those homeowners no longer need to visit laundromats. What’s more, the owners of the shopping centers started to get fancy with how they would charge rent. In the 1960s, rents were strictly gross – $200 a month in rent encompassed everything; but by the ’70s, landlords were charging single-, double- and eventually triple-net rents.
Also, the route operators became more aggressive with the apartment buildings, installing more machines. So, there was a huge downfall within about a five-year period where 35 percent to 40 percent of the self-service laundries in the Chicago suburbs went out of business.
By contrast, the city experienced an insurgence of stores during this time, because the city operators had picked up on the idea of building laundries with parking access, which led to increased volumes and eventually larger laundromats. Additionally, in many of the old Chicago neighborhoods, the rents were still relatively cheap.
How has the self-service laundry business changed over the years?
Certainly, the stores have gotten larger and larger. Back in the early ’60s, the average laundry was less than 1,000 square feet. In the late 1960s, it was up to 1,500 to 1,800 square feet. By the 1970s, it rose to 2,500 square feet. In the ’80s, it increased to 3,500 and 4,000 square feet. In the ’90s, it went up to 5,000 square feet. And now it’s not unusual to see stores in the 7,000- and 8,000-square-foot range.
Also, back in the 1960s and ’70s, people were building laundries where there were none, not building on top of other stores and taking business away from existing owners. The mental attitude of laundry owners was a bit different. There wasn’t yet the saturation that we now see in some laundry markets.
The availability of residential washers and dryers changed the game, too. In 1967, an eight-pound toploader sold for $370 retail; and, in the ’70s, the same washer cost $580. So, there were certain areas where homeowners couldn’t afford to buy home appliances, which of course later changed. Today, you can buy a toploader for $280.
The first influx of what you would call “laundromat investors” occurred in the 1970s, around the time of the Norge Town stores, which offered coin-operated laundry and drycleaning machines. Back then, you had conglomerates and other well-heeled groups – even movie stars such as John Wayne and Elizabeth Taylor – investing in a business model they didn’t have to work and knew nothing about. Those first investors didn’t last.
A hugely positive change was the influx of Hispanics into the U.S., from the 1980s through today. Many were low-wage workers who became strong self-service laundry customers. This development increased the business tenfold.
I’ve predicted that, as long as the Hispanic migration continues, the coin laundry business will be healthy; but, if it reverses, the laundry business will drop. And I think we’re experiencing that today.
What are the most dramatic equipment enhancements you’ve seen?
The most influential equipment change was the advent of the stacked dryer. It gave store owners the capacity to double the amount of equipment without doubling the amount of square feet. In my mind, that was the biggest advancement.
The second-largest change was the proliferation of larger machines within the industry. The manufacturers made these large machines more sophisticated and more user-friendly. Mechanically, today’s models are much superior over the first generation of large machines. And these big machines give owners more money-making capacity per square foot.
Increased overall energy efficiency is the third-biggest change. Today, we have the best utility control we’ve ever had.
How has your business changed over the years?
As a distributor, I never bothered building stores or going into the coin laundry business. I selected my modus operandi; I was going to be a distributor. I’m not going to be selling candy, building laundries or selling washing machines. I’m a supplier.
You have to choose what you’re going to do and then try to be the best at what you’re doing, rather than doing 10 different things and trying to grab money from 15 separate sources.
I still do business the same way I’ve always done it; however, the market has changed. The small coin-op detergent box is becoming obsolete, with owners selling more of the larger containers of products.
My activities are changing because there aren’t as many soap machines out there – and the ones that are out there are not selling as much as in the past. So, I probably spend more time selling, rather than servicing, because there’s not as much to service these days.
Of course, I still sell to commercial and institutional laundries as well.
In addition, I spend about 35 percent of my time assisting or advising others who want to do something in the laundry industry. Basically, I like to see people make money, and I don’t like to see people lose money. If I can help them in any way, I do. It’s just my nature. So, I spend a good portion of my time not making money, but trying to help people within the industry.
My main goal ever since I’ve been in business has been to have a strong healthy industry – and, when businesspeople make money, everybody is happy.
Have laundry owners changed at all?
The coin laundry business essentially started in about 1958. The entrepreneurs getting into the business back then were hardcore businesspeople. A lot of them did their own service. For the most part, they were self-made people, and they had the foresight to envision what was happening and what was going to happen. It was a more hands-on business with a different type of owner.
The early store owners had a lot less to work with at that time and, maybe because of that, there was more common ground and, in turn, camaraderie among operators.
I remember the very first coin laundry meeting I attended in 1963. There were about 300 laundromats in Chicago at the time – and 150 coin laundry owners showed up. The business was a livelihood then, not “an investment.”
I believe the average present-day laundry owner is primarily an investor looking at spending less time running the business, just getting it technically set up, whereas the old-time store owner was a grunt.
How has the laundry industry improved through the years?
The equipment is definitely much improved. For example, the card systems have taken hold, and I think it’s going to be the only way to go in the future.
Another big improvement is the mechanical stature of the machines. Within the last 10 to 15 years, there has been more attention given to upgrading the equipment than there was in the previous two decades.
Also, I think many of the operators getting into the business now are more financially aware than they were in the early days. They’re more professional, and they know exactly what to do with the books and the financing. In the early days, that aspect of the business was kind of a shadow. But, because of the cost of going into business today, owners have to have some type of an economic background.
At 73, what’s your daily business routine like these days? It doesn’t seem like you’re slowing down at all.
My daily routine includes somewhere between 20 to 30 phone calls – most of them while I’m driving. Much of my time is spend in my car, driving to or from accounts. I cover an approximately 60-mile radius around Chicago, so I put about 40,000 miles a year on my vehicle.
I’ll meet with customers and talk with them about them buying or selling something, running different promotions, lease situations, what’s on the market and so on. Of course, I still repair about eight to 10 soap vending machines a week, just because I like doing it.
As I mentioned before, a lot of my time is spent consulting. Every day I’ll field three or four questions about what to do, what to build, where to build, what to buy, when to sell, and on and on.
Your opinion carries a lot of weight in the Chicagoland market, as well as nationally. Why are you so in demand?
First of all, I’ve made friends with most of my customers. I still have friends who have since left the business. And, because I like people, I’m comfortable with them, and they’re comfortable with me. We’ll get into conversations that often are beyond the scope of the laundry business, sometimes on personal levels. And I’m very receptive to that.
Also, with time comes experience. If I’m in 1,000 laundries a year and you’re only in 10 laundries a year, and if I’ve heard 1,000 different stories a year, I should know more than you. It’s not because I’m more intelligent, but simply because I’m more exposed to the problems and the solutions.
Another big difference between me and everybody else out in the street is that I consult for free and I discourage a large percent of the people who want to do something. I’m not trying to sell anybody anything, because I’m not getting anything out of it.
I’ll discourage people from certain decisions because, in today’s economy, when you make a bad move with a buying or selling decision, it can affect your whole life – it’s not like you’re investing in a peanut stand. A bad laundromat decision will last you your whole life, and I don’t like to see people hurt financially.
Are there any bad decisions in your past that you wish someone would have warned you against?
The biggest mistake I made, which was back in the 1990s, was bringing my family into my business. When you make a decision like that it only works one of two ways – either it’s a great move or it’s the worst move you can possibly make. It’s a good move if you’ve got a family that’s knowledgeable and going to work with you, but it’s a negative if you’re doing it just to supply jobs.
For me, it was a bad decision because my family members had key positions that controlled my money flow, and there were some very negligent moves made. They went beyond my control and, because it was family, I didn’t double- and triple-check. I took situations at face value, and it was a disastrous move.
On the other hand, what’s been the most gratifying aspect of your life in the laundry business?
The most gratifying experience was working for Carl Carlson at LNS. I learned a lot about life from him. He was a sales manager at one of the largest corporations in the country – then he fell all the way down to the bottom, and picked himself up and made another successful go of it.
He and I worked together like two best friends, and I picked up most of my business acumen from him. He was a true mentor.
So, it was especially gratifying that, before he died, I was able to help bring that business up to where he saw that his little startup actually succeeded. He passed away knowing the business was there.
You have a rather unique way at looking at business. Would you mind sharing it?
I’ve always looked at business with less than a very serious nature. I’ve looked at it like I was playing a game. If you take the emotion out of the game, you won’t be disappointed. For me, win or lose, it’s always been the experience of what I was doing that was gratifying. It was the people I was meeting and the friends I had. For me, it’s like going out to play tennis – win or lose, I’m going to get something out of it.
People get into trouble when they treat business situations with a great deal of emotion. When logic and emotion get in the way of each other, a bad business decision is generally the outcome. But, when you treat business strictly as a game, then what move are you going to make? The outcome will be altogether different.
What keeps you active in the laundry business?
The people and the relationships. It makes life interesting, and it keeps me active. I think everyone should stay active until they no longer can be.
Plus, I don’t know other businesses, but I know this one. And I like the people in it.
What are the keys to longevity in this industry?
Continuity is the key – the continuity of repair, the continuity of cleanliness, the continuity of equipment upgrades, the continuity of seeking the right location, etc. I find that most businesses start falling apart when the continuity is no longer there.
In addition, you need to keep an open mind to change – from your equipment mix to your location. For example, you might have a winning location now, but where is the population going to be five to 10 years from now. Look ahead and be open to changes.
What does the future look like for the self-service laundry business?
This business is going to be around for a long time, but it’s going to change. I think the concept of the small store is kind of finished in most markets.
The future is going to be in the larger laundries, primarily in ethnic, blue collar areas. And, with larger stores, there also will be fewer stores.
For example, in 1973, I had 1,500 coin laundry customers. Today, I have 340, but those 340 stores are probably four or five times the size of what was out there before. That’s the future.
The number of store owners leasing their laundries will drop. You need to own your building; the operators who are profitable today are the ones who have done that.
And, lastly, the route operator will become more sophisticated and more aggressive. The biggest competitor you have is the route operator, who takes away more laundromat business than the home washer and dryer.
Tomorrow’s self-service laundry must offer more than the route operator – larger machines, clean facilities, ample parking and some helpful sub-services. The store owners who offer that will be around for the long haul.
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