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January 24, 2012
2012 Panel of Experts Ready to Answer Industry Questions (Part 3 of 4)

Textiles: Tom Langdon, Encompass Group

I am vice president of sourcing and purchasing for Encompass Group. I have spent the past 30 years in a variety of roles and responsibilities in the textile industry.

For the last 20-plus, I have traveled the globe, extensively developing and sourcing all types of textile products. My product experience spans from retail home fashions, to protective and military apparel, and into the medical textile products area. I am experienced in woven, non-woven, and knit manufacturing techniques along with all aspects of printing, dyeing and finishing.

tom langdonMy educational credentials include a Bachelor of Science degree from the Stetson School of Business at Mercer University, along with various continuing education certificates in customs, compliance, CTPAT, supply chain management, and ISO 9000 registration. I sit on the Techtextil North America 2012 Symposium Advisory Council and chair the Medical Educational Section. I see my role on the panel as giving readers the layman’s perspective on each monthly topic and how obtaining the actual textile items is affected.

Two of our biggest challenges in 2011 were the unprecedented run-up in raw-material costs and mitigating the impact to our customers. We also were faced with some historic geopolitical changes in the world, of which the unrest in Egypt created some specific obstacles to our industry.

I was already scheduled to visit Egypt at the end of January 2011, the week before the Mubarak regime fell. I remember spending the first half of the Super Bowl on the phone with my travel agent rearranging my itinerary to cancel the Egypt portion of my trip. Later, I found out that the head of the largest government-owned textile mill in Egypt was removed from his post and arrested.

Probably our greatest accomplishment realized was in educating our customers and others in the industry on market conditions. This entailed explaining how contributing factors such as the price of cotton, energy, and currency exchange rates affect the price, quality, and availability of laundry textile products.

Encompass benefited from an intercompany market update I published monthly, which helped our sales force reach out to all of our customers as well. The price of cotton became such a hot topic at one point that it even made it on to NBC’s The Today Show.

Let’s all hope we have a much calmer and more stable 2012. I look forward to participating on this panel and appreciate being selected.

Linen Supply: Stephen Marcq, General Linen Service

I’m the director of business development for General Linen, with corporate offices and the processing plant located in Somersworth N.H. I’ve been with the company for approximately 22 years, starting as a production manager. I worked as a production and depot manager for several other companies before returning in 1992.

stephen marcqWhile most of my time with General has been on the service side of the business, I’ve done everything from load diapers (remember those?) to running the service department and then the sales department, which has given me a well-rounded background that has served me well.

Today, I work extensively with the sales and service teams to manage, retain and expand our business presence with large corporate accounts, and especially with a variety of multi-site operations, both healthcare and hospitality. Setting up various customized programs designed to appeal to the particular needs of off-site management or ownership is an accomplishment I am particularly proud of.

We have 3,800 customers in four states, serviced from our main plant and two additional service centers in New Hampshire and Maine. Our plant mix consists mostly of hospitality and healthcare business, with lesser amounts of industrial and dust control.

With both of those areas affected by the economic downturn over the last few years, and healthcare especially hit hard in the last 6-12 months, a major challenge right now is in maintaining margins and sales increases while retaining customers in an increasingly competitive, cost-conscious environment.

We have implemented route optimization software to reduce distribution and delivery expense, installed a stack economizer to reclaim waste heat, increased our sales team, set up a key/multi-site customer and corporate visit program, and have many other projects in progress or in the works.

Our mixed-plant status can be, at times, both an asset and a liability. When one segment is down, we have historically grown in another and been able to protect jobs and revenue. But gaining maximum production and delivery efficiencies can be harder for a mixed plant as well, something that we are doing our best to address.

I am honored to have been selected to serve on the panel, and I am looking forward to contributing during 2012.

Hotel/Motel/Resort Laundry: JR Norris, Delta Linen

I’m the operations manager for Delta Uniform and Linen, the largest family-owned and operated commercial laundry in Albuquerque. I am honored to have been chosen for this panel.

jr norrisThe Randall family established Delta Linen in 1948 as a small drycleaning business. The decision was made to take the business into industrial linen rental, and Delta Linen has since flourished. It now services more than 300 restaurants, casinos and fine hotels, and is growing daily. Delivering clean and wrinkle-free linen and hospitality wear with 24-hour-a-day customer service has contributing greatly to our success.

I worked as a general manager in the restaurant business for almost 20 years, sitting on the other side of the table in dealings with linen companies. This experience has helped me greatly with my transition from restaurants to linen service and having the ability to under a restaurant’s needs. It encourages me daily that Delta Linen has had the same beliefs and integrity for more than 60 years!

I have faced several challenges after diving headfirst into the linen business, but that’s been the fun part. The biggest has been working with and understanding the quality and maintenance aspects of hotel linens.

I have seen sub-par cotton quality coming from many manufacturers over the past 18 months. We have had to change several processes, including how we order and wash, to ensure the longevity of the textiles. Because of this, production has almost been more challenging than the cleaning of the products themselves.

We were blessed with continued growth this past year despite the hard economic times the country faced. We have taken on several new, large accounts, along with a new contract with a resort. And we recently renewed our contract with the largest casino in New Mexico.

We continue to strive for the best every day, with the mind-set and commitment that our service is our contract and it is as good, if not better, than a golden handshake. I intend to see that Delta Linen maintains this philosophy for many years to come.

Tomorrow: Introductions to representatives from the equipment manufacturing and chemical suppy sectors, plus a member at large...
Click here for Part 1.
Click here for Part 2.

October 25, 2011
Deductions: Get ’Em While You Can (Part 1 of 2)

ARDMORE, Pa. — Thanks to the 100% “bonus” depreciation write-offs created by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, many laundry and dry cleaning businesses are discovering that capital investments in equipment, machinery and other business assets are more affordable today than ever before. Remember, however, the 100% bonus depreciation write-off is available only for qualifying purchases made by laundry services and businesses in 2011.

Those that have hesitated or postponed making capital investments because of the recent economic downturn might now want to consider how the combined use of incentives and the 100% bonus depreciation can substantially reduce the cost of capital investments. Even funding those new-equipment purchases is easier—at least for a while.

Bonus Write-Off Background

Bonus depreciation was originally created in 2002 as a temporary economic incentive by which companies could immediately deduct 30% of the basis of qualifying assets that were placed in service after Sept. 10, 2001, and before Jan. 1, 2005. An increase in the percentage of the deduction in 2003 to 50% expired in 2005. Reintroduced by lawmakers in 2008, bonus depreciation has subsequently been extended three times.

Although the concept of taking the additional depreciation in the first year is quite simple, changes to the applicable percentage, timeframes during which each is available, and variations related to unique types of assets that qualify have made application of the rules somewhat complex.

The definition of property that is eligible for bonus depreciation under the 2010 Tax Relief Act is the same as under prior law, but the percentage and placed-in-service dates have changed. The percentage increased from 50% to 100% for qualifying property placed in service after Sept. 8, 2010, and before Jan. 1, 2012. Those laundries investing in qualifying assets will be able to fully deduct the cost during the current tax year. This will reduce taxable income and taxes paid, resulting in an increase in cash flow that can be reinvested in the business.

Expensing Write-Offs

Last fall’s Small Business Jobs Act increased the Section 179, first-year expensing dollar and investment limits to $500,000 and $2 million, respectively, for 2010 and 2011. The Tax Relief Act included a $125,000 dollar limit and a $500,000 investment limit for tax years beginning in 2012 and expiring after Dec. 31, 2012.

Unlike bonus depreciation that applies only to “new” property, a laundry or dry cleaning business may immediately deduct as a Section 179 expense, up to $500,000 of both new and used business property placed in service during the tax year. The Section 179 expensing write-off is reduced, dollar for dollar, by any property acquisitions in excess of the $2 million investment ceiling, limiting the write-off to smaller businesses.

Extending Leased Property and Other Write-Offs

Before passage of the Tax Relief Act, qualified improvements made to leased property, qualified restaurant property and qualified improvements to retail property that was placed in service before 2010 was included in the 15-year MACRS (Modified Accelerated Cost Recovery System) class for depreciation purposes—that is, those expenditures could be depreciated over 15 years under the MACRS standardized depreciation system.

The 2010 Tax Relief Act retroactively extended the inclusion of qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property in the 15-year MACRS class for two years through 2011.

Layering Opportunity

It is not only federal tax write-offs that can help reduce the cost of capital investments. Many laundry and dry cleaning businesses making capital investments during the 2011 tax year can also benefit from state and local credit and incentive programs. In fact, many states offer a tax credit equal to a percentage of an eligible capital investment made in that state.

Eligibility for the credit may depend on industry or particular use of the underlying asset. For example, states like Massachusetts, New Jersey and Oklahoma offer investment tax credits to manufacturing business for assets purchased that will be used exclusively in manufacturing activities. As an alternative formula, Illinois offers businesses predominantly engaged in either manufacturing or retail an investment tax credit for the purchase of all qualified purchases placed in service during the year. Best of all, the assets are not required to be used exclusively for manufacturing or retail activities.

Tomorrow: Opting Out…

March 31, 2011
Buy Best-Quality Textiles; Thwart Costly Abuse (Part 1 of 3)

“Cotton prices are incredibly high, and our textile suppliers are warning that they’ll continue to go up. Can you suggest some ways we can extend the life expectancy of the textiles that we process without completely sacrificing quality?”

Textiles: Elizabeth Easter, Ph.D., University of Kentucky, Lexington, Ky.

February 16, 2010
Survey: Cleaning Professionals Cut Back in Response to Economic Climate

CINCINNATI — Eighty-five percent of cleaning professionals have adopted a “doing more with less” approach in response to current economic conditions, according to Procter & Gamble Professional’s recent “Cleaning in a Down Economy” survey. The survey was launched to gauge how decision makers managing in-house or contract cleaning services in the healthcare, education, retail, commercial, foodservice and hospitality industries have reacted to recent business conditions.

July 15, 2009
Globalization Puts Greater Emphasis on Grading Textiles

The global marketplace has made quality control a more difficult item to manage.

During the past six months, raw-material costs have gone up more quickly than expected and some foreign manufacturers have cheapened their products in an effort to improve the bottom line. Many of these changes don’t become readily apparent until the product is washed and put into service.

October 31, 2008
Tracking, Control Are Keys to Merchandise Control (Part 2 of 2)

“Our facility’s linen and uniform losses are becoming a real issue, and I need to develop a strategy to improve security. Where do you suggest I begin? Item tracking, surveillance, keep it all under lock and key? How far should I go?”

Technical Support: Jim Mitchell, Ecolab, Eagan, Minn.

Although you’ll probably never solve all of your linen loss issues, awareness will go a long way in reducing losses.

September 24, 2008
It’s Everywhere, but What Exactly Does That Buzzword ‘Green’ Mean? (Part 1 of 2)

“What ‘green’ laundry products are available for my operation? Are they truly ‘green’ or ‘environmentally friendly’? What’s the difference? I hear the term applied most often to chemicals, but can’t equipment or textiles carry that description, too?”

Textile/Uniform Rental: Steve Kallenbach, American Dawn, Los Angeles, Calif.

August 19, 2008
EIA’s Short-Term Energy Outlook Shows Decrease in Natural Gas Prices

WASHINGTON — The Energy Information Administration (EIA), the government's energy statistical arm, released its short-term energy outlook Aug. 12, reporting a slight decrease in the price of natural gas as well as gasoline and diesel fuel.

July 11, 2008
Fear of Risk Can Hinder Managerial Effectiveness

One of the hardest things for a manager to do is manage risk — the kind that comes with adding a new service or customer or promising to cut labor expenses if new equipment is purchased.

Managing risk properly is an essential part of what makes a manager above average or excellent. The fear of risk often holds a manager back or prevents him or her from adequately preparing for the future.

March 13, 2006
Textile Mill President Concerned About Imports Trend

There has been a trend occurring that laundry operators and hotel owners should be aware of concerning their bed linens. Many of the large textile mills have been, in effect, forcing properties that had been using domestic bedding to use imports instead. Due to their inability to compete using the higher quality, domestically made products that have always been the hallmark of a well-adorned hotel room, they are now closing many of their domestic production facilities and are becoming importers of sheets and pillowcases from countries all over the world.

There has been a trend occurring that laundry operators and hotel owners should be aware of concerning their bed linens.

Many of the large textile mills have been, in effect, forcing properties that had been using domestic bedding to use imports instead. Due to their inability to compete using the higher quality, domestically made products that have always been the hallmark of a well-adorned hotel room, they are now closing many of their domestic production facilities and are becoming importers of sheets and pillowcases from countries all over the world.