COVID-19: A Storm Unleashed Over the Textile Services Industry
Many of the business sectors to which members of the linen, uniform and facility services industry provide laundry service, including restaurants and hotels, are among the businesses hardest hit by closures and revenue losses in the midst of the COVID-19 pandemic. TRSA recently sent a survey to its members to gauge the impact of the crisis on their operations.
Below is a snapshot of the survey results from each market sector:
- 89% of operators’ revenue trends are well below expectations during the past 30 days
- 100% expect revenue to fall well below expectations during the next 30-60 days
- 71% expect revenues to fall well below expectations for the next 90 days, while 50% expect them to fall well below expectations for the next 120 days
- 67% of respondents noted that add/stop rates in the last 30 days have deteriorated versus last quarter. 67% also indicated that interest from no-programmers in the past 30 days have deteriorated versus last quarter.
- Laying off employees, cutting hours and closing plants due to loss of business, as well as eliminating and reducing routes.
- In the past 30 days, 83% of respondents say revenues have met expectations, with 17% reporting revenues exceeding expectations.
- During the past 30 days, 67% of respondents note add/stop rates at existing accounts has been unchanged from last quarter. 17% say that it is deteriorating versus last quarter, while 17% note it’s improving since last quarter.
- Of note is a slight deterioration on the outpatient medical side of the industry, with operators noting that they expect things to pick up once elective surgeries are allowed again.
- 100% of survey respondents report revenues well below expectations in the past 30 days.
- For the next 30 days, 100% of operators expect revenues to fall well below expectations. The same amount expect revenues to fall well below expectations for the next 60 days. 67% expect revenues to be well below expectations for the next 90 days, and the same percentage expects revenues to remain well below expectations for the next 120 days.
- 67% of hospitality operators expect revenues to return to pre-COVID-19 levels in six months, with 33% expecting it to take a full year.
- Laying off employees, cutting hours and closing plants to counteract the temporary loss of business, while some are eliminating or shortening routes, or reducing service.
- 80% of operators expect revenues to be slightly below or well below expectations in the next 30 days
- 100% expect revenue to be slightly below or well below expectations in the next 60 days
- 75% expect revenue to be slightly below or well below expectations in the next 90 days
- 75% expect revenue to be slightly below or well below expectations in the next 120 days
Roughly 23 million of the 152 million jobs in the United States are at the epicenter of the COVID-19 crisis, according to a recent study by The Conference Board, New York, a nonprofit think tank that helps business leaders navigate the issues impacting business and better serve society. According to the Conference Board report, some of the hardest-hit sectors are in the hospitality industry (hotels, restaurants and entertainment). Other hard-hit sectors include temp-help services and air transportation, which could see layoffs threatening as much as 10.2% of all jobs. The takeout food, bar and ground- transportation sectors represent another 4.9%.
Additionally, linen, uniform and facility services industry analyst Andrew Wittmann, a senior research analyst at Baird, noted several trends that likely will impact the industry moving forward in a recent analysis of a prominent company’s stock. Wittmann noted several factors that will have a negative impact on the industry in the near term, including unemployment at client businesses due to forced closures, a significant reduction of economic activity at its customers in the near term with uncertainty ahead, and potential permanent closures for small businesses if the COVID-19 closures carry on long term. Wittmann did share a bright note in his assessment; however, noting that at this point in time, the impact on the long-term U.S. economy is not expected to be as drastic as during the Great Recession that lasted from 2007-2009.