At the end of August, US Dry Cleaning Corporation (OTC:UDRY) began trading on the over-the-counter bulletin board under the symbol UDRY as the first dry cleaning retail chain to be publicly traded in the United States. On July 19, 2007, the company completed an initial public offering of $6.1 million, which will be used to advance the Company’s plan to be the industry's first major consolidator in order to create a premier national chain.
Director and CEO Robert Y. Lee stated:
We are very proud to announce that our stock is now available to the public. We have a strong business plan to grow rapidly by acquiring profitable dry cleaning businesses that are number one in their markets throughout the US. Consolidation will create accretive value through economies of scale, operational synergies, best practices and professional management of the highest quality.
US Dry Cleaning has a significant first-mover advantage to consolidate the fragmented, $9 billion US dry cleaning market as the first public company with access to the capital markets following its recent IPO. The company anticipates an AMEX or Nasdaq listing for its shares by the end of this year, further increasing its visibility among investors. The management team is experienced with a strong business background in both dry cleaning operations and acquisitions. Ample opportunities exist for consolidation among the estimated 27,000 dry cleaning operations in the US, and the company offers investors an easy to understand, pure-play business model that is economically insensitive. The company expects to be EBIDTA positive by mid-2008 with a revenue target of $50 million at that time by executing on a focused strategy to only acquire leading dry cleaning operations with at least $5 million in annual sales. Beyond mid-2008, the Company expects to report meaningful net income at revenues of $100 million.
The dry cleaning industry in 2007 is very similar to the retail video industry in 1987 with fragmented "mom and pop" type operations with no large national company dominating the scene. US Dry Cleaning's business model is very similar to the model created by Wayne Huizenga at Blockbuster Video (NYSE: BBI) in 1986. This consolidation model consists of buying successful chains that have a dominant market share, and then use the resources and economies of scale of a public company to improve the profits of the chain by reducing existing operational costs.
The Company’s mission is to be a fundamental consolidator that is totally committed to making only accretive acquisitions and all decisions are driven to increase value to shareholders. US Dry Cleaning's mission is to make smart acquisitions that make the company stronger and more profitable. The Company will take advantage of a skilled management team, corporate organizational experience, as well as having the ability to access capital associated with a large public company. Other efficiencies of their business model include: centralized management that eliminates unnecessary personnel, the use of modern equipment as large operators can afford the newest technology to greatly reduce the cost per garment, volume buying power that also applies to marketing & advertising initiatives, minimized cost of opening a new storefront, and brand name recognition for customers and investors as the company grows to be a successful regional to national expansion play.