EP5: Expand or Build: What happens when you outgrow your textile rental facility?

FULL TRANSCRIPT: 

Eric: Welcome everyone! Eric Smith here with Alliant Systems and we are back with episode five of Laundry Talks and if you're new to the podcast thanks we're glad you're here this is where we talk about laundry tell stories, and learn about what some of the best-in-class textile rental operators are doing today in their businesses and I'm really

excited about today's topic so we're going to talk with a company that has operated a mixed textile rental facility for almost 80 years in one of the most densely populated places in the world New York City so what happens when you're successful and growing business your fourth generation of the family is just starting to manage the business but you're outgrowing your plant and technology and you're landlocked so expansion of the existing facility isn't possible we're about to find out so this is a really big topic and we've brought together a big group today so today it's my pleasure to talk with some good friends from Arrow Linen Supply John and Anthony and Johnny Magliocco.

This is the podcast for the Textile Rental Operator Community to learn new things share ideas and drive conversations. Welcome to Laundry Talks with your host, Eric Smith. This episode is brought to you by Alliant Systems.

Eric: Welcome guys, how's everyone doing today?

All: doing good, all right, doing good, Eric.

Eric: so we're going to start from the top down here we're going to talk to John. So, we've got third and fourth generations here today, is that correct?  We're here with your sons Anthony and Johnny today, hey guys how are you doing?

Anthony: good not bad, how are you doing?

Eric: pretty good, I'm good I'm good.  I'm excited to have this, we've been talking about doing this for a while and it's just great to
have you guys on. I know you're busy, so thanks for your time.

Anthony: it's weird to be on I've listened to a couple of podcasts before so hearing your voice talk to us is a little weird but I will get used to it.

Eric: well good well thanks um all right. Let's talk about generations then one and two so where did it start John? Do you want to share that with us?

John: so  pretty much just started with my grandfather and  he helped us with friends and board into the into their company and  eventually brought them out  and then my father, who is the second generation, he practices law well, he didn't practice one, he went to law school and then he got drafted and when he came out he thought he was going to open up a law office meanwhile they said no you're coming into to the laundry business so he ended up in the laundry business and  you know they weren't
doing well back then and he made some changes and decided that he was going to stay and keep it going and  we kept on growing and then I'm one of  seven
kids but my father has three sons also so when the facility they were in got too small then he found another location in Brooklyn uh we started to work hard there and
we started to outgrow that and then we ended up purchasing the place out in Long Island Garden City and it's about now 10 years old it's very up you know probably top technology and we just find then now with the fourth generation here that it's growing even more doing a great job running it and uh so now we're looking to actually add another uh uh post-flow wash tunnel to increase our volume here as well.

Eric: oh wow, so one of the things I like to ask people when they come on Laundry Talks, how they got involved in the laundry industry, it really doesn't make sense to ask you guys that, it's pretty evident why you're involved but I did love to hear how the business started; that's great. 

Anthony: yes, must be in the gene or something.

Eric: exactly, but as far as the younger generation here, I do know that Arrow Linen has a great presence on Instagram right now. Johnny, is this your this is your domain right here?

John Jr:  yeah that's my making there it's, that's my baby yeah.

Eric: we got a lot of questions but I do want to focus on that for just a second because I think you guys have a great Instagram account  (@arrowlinensupply) you always log in and see kind of a lot of the Arrow Linen trucks in the wild; which is always nice to see when they're spotted, and also I know that for some reason, you actually have some customers that have gotten the Arrow Linen logo tattooed on their body. Is that correct?

John JR: that is correct, we have three neck tattoos and we have one thigh tattoo.

Eric: yeah, so that's awesome. Love seeing that and also you know one of the other great things about Arrow Linen is it solves the problem for me because I get questions all the time about what it is that I do, people you know after you tell them they still think that I'm working at a dry cleaning operation, so now for people that don't know Arrow Linen was featured on the New York Times cooking show, the Youtube show "On the Job" about a year or so ago, and it is just a fabulous video that really does the best job of explaining what it is you do in your business every day and I loved watching it. I don't know what kind of feedback have you gotten from that, you have a lot of people come up to you and and talk about seeing that online.

John JR: yeah, well I think primarily like you said, I mean, I've had friends, lifelong friends, that you know... I've always said "I'm going to work" and  I'm always "I'm going to the laundry" and they always pictured a laundromat, right but once they saw that video, they said "Oh my God I finally understand you know why you're always working late, this place is huge, these machines are wild" it brings Clarity.

Anthony: yeah exactly the clarity of the video created was really good.

Eric: and I know you've got that on your website it's just must be great marketing that kind of  keeps giving back every single
day because you kind of have that right there anyone can see it every time they go to your website.

John JR: yeah, I think the video surpassed like 100,000 views recently so a lot of the exposure, it was good.

Anthony: that's crazy it's kind of crazy but it does make it so easy to just explain to someone what we do now by just sending them the links up the time yeah.

Eric:  it's amazing the reach that that gives you and like I said just provides some great marketing for Arrow Linen in your area of the country. So, actually, John was
talking about how the business was originally in Brooklyn and that was the facility that you were running, you know since the 1940s, and I have actually been to that facility before and I remember the kind of being walk through the maze up and down through that facility and it appeared to me that a lot of creative work went into keeping that facility running as you continued to grow and started to create some challenges, you know, from you just from a real estate standpoint, so talk a little bit about you know when did you really become serious about thinking you needed to find a new facility.

John: so, what happened was when I came out of college and then we started changing over to more advanced technology in the washroom; we went from conventional washer-extractors and we ended up going to Tunnel wash, which made such a big difference and there was so you know, the savings, and energy, water, labor was so it was so great.

And I just told my father to keep on buying on the business, which we kept on doing and it ended up being that we were running at least to shift at least six days a week and it was very, you know, demanded on the on the managers and like that. And even with the drivers, you know, the geographical territories that we were covering you know from Brooklyn we were going all the way out to Montauk, so you know we tried to figure out a good location that we could split the routes geographically
and relief the drivers and also relief the laundry under the pressure that was given.

 Eric: so even if you had the chance to have expanded the Brooklyn facility that wasn't really still the best decision because, one, you wanted to move the facility make it more geographically you know efficient for your entire service area and I'm sure there are other ways that you probably benefit it by making the move. Do you want to talk about any of those that you've also benefited from?

John: well first of all, you know that we were able to buy a facility out here in Long Island; compared to buying in the five barrows, the prices in the five boroughs are outrageous; so we kept on it and it took us a long time, like four years to find this location.

Eric: I've never heard I've never heard that it's expensive to buy real estate in New York; that's yeah I'm sure that was a big deal; so you did so you scouted for four years years

John: It took us a long time. I mean the benefit with that was that the five boroughs,every year our value of our property in
Brooklyn just like multiply it you know it just kept on going up and up and up so that was the that was a great benefit that we waited so long you know it just happened to work that way that we couldn't find anything and we were benefit by the value of the property and look going up and  but I mean I feel that one of the the best values about plant out here in Garden City is that our families live not too far from here especially my dad who's 93 he still comes to work six days a week, still drives every day. I think that's helping him as well.

Eric: That's awesome!

Anthony: Yes,  sometimes he will  get to the office a little early before me and then I got to start waking up early and getting up because you don't want the boss showing up before you do

Eric: but now what's his name? Because I've only heard him referred to as the boss before, but I'm sure he has a name.

All: yeah, so take a guess!

John: he's John Ambrogio Magliocco, so I'm John Anthony Magliocco, my son John Anthony Magliocco, but yeah otherwise I would have been a junior and John would have been the third.

Eric: that's fabulous, so let's talk... so four-year project to find the location; you found the new plot of land for this project and by the
way the Brooklyn facility still uses that as a Depot facility, is that accurate?

John: that's accurate, yes.

Eric: Okay, so you still have that so now really the work is just beginning on breaking ground building facility so how long did that process take from from start to finish?

Anthony: oh, it took at least two years or two years and a half.

Eric: wow and let's talk a little bit about some of the new technology that you're able to bring into this new facility now that you have all the space that you need. Do you want to just give me a few highlights of some of the things you were able to do. 

John: well one being that pretty much everything over here is all in the first story of the building. It's 72,000 square feet.  The base of the building is 60,000 and then we have 12,000 square feet on the second floor. Half of that is probably for the office, and half of that is for our garment system, as well as a break room for the employees, marker rooms, and bathrooms but we when we bought the building we raised the roof 11 feet 2 in; so I believe we're like 27 clear now with that height you'll be able to automate because a a lot of the rail system runs on gravity so because you have that height and and the building 60,000 square feet to work with you're able to use the gravity which helps your automation greatly.

Eric: it gives you that ability for soil storage sorting storage clean product storage

Anthony: yes, you know, just transporting the goods, too because in Brooklyn a lot of the goods happen to be transported with you know steps from an employee whether they were pulling a bin or dropping merchandise into a bin and then rolling the bin to the finishing destination and then even in the Solar room with the mag loading of the washing, so when my dad got the height with the new facility just transporting the goods within  the work area was that much more efficient

Eric: it's a real luxury for anyone that's been able to build a new facility to get that vertical space and let's talk a little bit about what you mentioned, a brand new sorting system, tell me a little bit about.

Anthony:  yeah sure so we have a can-user garment sorting system,  it has five rapid computer stations and the storage area that my dad was talking about, it could store up to about  27,000 garments overnight in the storage rails. That was one of the areas that really  reduced our labor cost specifically in that department when you compare the Garment Department in Garden City versus the Brooklyn location that that we were operating out of; it's able to sort around 343 pieces every 15 minutes and like I said it's a huge benefit we really reduced our Workforce in half when we opened up the Garden City facility with the Garment sorting system from canny, you know all just transporting the goods, too..

Eric: Wow, yeah. So, I'm going to come back to the technology but I have one other question I wanted to talk about, even though you're a mixed plant, let's talk a little bit about what your bread and butter is. I mean what is your main you know what's the prototypical customer that you service that you want to service that you're marketing to uh give me a little bit of an idea of your product mix

Anthony: well, we were more of a mixed plant prior to Covid; we were probably about 80/20 in terms of food and beverage compared to hospitality, Post-Covid we
decided to focus primarily on our food and beverage rental customers and that's solely what we do right now. So our accounts are typically restaurants, catering halls, pizzerias, and Delis. We operate with two different route styles,  we identified them as Wholesale and Retail customers. Wholesale being your heavier customers, if you will, restaurants with multiple delivery days, and frequency, they're typically using table linen and napkins, back-of-the-house, front-of-the-house-items from us. And then  the Retail side is usually once-a-week accounts with delivery schedules typically dealing with just flatwork, mops, aprons garments
and not any linen items; so there are two different styles of customers that we do service. 

Eric: yeah, that's great so you have this sorting system and it's primarily to sort service garments and you've got that many of... that's amazing.

Anthony: yeah, the garment system works really great and it does a really good job at creating those sorts of jobs so that everything can be processed  by
route and by route style; so it it helps a lot when you're trying to forecast and properly schedule your your garment jobs for the day.

Eric: And you have that system is based on RFID; you have fully adopted RFID technology on the Garment side, is that correct?

Anthony: Correct, yes. So, all of our garments are equipped with an RFID chipping and since the Alliant conversion also a barcode label.

Eric: oh, so you're doing barcode as a backup along with RFID but the sorting is all occurring just off the RFID?

Anthony: Correct, yeah and we did that a while ago, I forget how and when... but  my dad started prepping that actually in Brooklyn because
he knew he was going to be going to the Garment sorting system when he opened up Garden City so luckily I didn't have to
deal with that headache because it was probably a pain, so that was kind of all ready to go without
that um you can't you know you getting the full benefit of a garment sorting system without having the RFID chips equipped in your garment is a little more difficult

Eric: yeah and you've been able to you know Implement some new billing techniques for you know missing pieces and lost and damaged pieces that you ship out you don't ever see again we talked about that recently do you want to talk a little bit about that program.

Anthony: that was the bread and butter for the Alliant conversion that we finally got to utilize all the hard work that my that the employees did before us with equipping everything with RFID so yeah now that we're on the  Alliant System, we're able to fully track a customer's garment inventory; determining last time it was sent out, last time it was soiled. We're able to assign cancelled flags to certain garments.

And if there's standing issues or sizes need to be decreased based on inventory levels you know from a service and it just made that conversation so much easier to have with the customer you know our service managers being equipped with the data to say: "okay, well you know this is how many medium shirts you have in circulation; this typical goes you know for two guys changing, five days, every week" "Oh, but I really have Five Guys changing every week with medium shirts and they work six days a week".

Well, then your inventory has to be increased and so the service manager can now go ahead and have that information right in front of them when they're handling a service ISS, a service call, and can go ahead and generate a work order so that their inventory levels could be properly maintained and the customer can get service correctly. But just from that essence of being able to have the data and understand what a customers has an inventory assigned to them is huge and then you know then you have the ability to track your losses which is also you know a very challenging part in this business.

Eric: well then yeah that's great to hear I'm going to turn back to Johnny. We're not gonna let him off the hook here so since he's more on the social media side a couple of questions, so this had to have been a big move for your customers.  I'm just curious how did you explain the move to your customers? what did they think of it? Did you lose some customers? I mean, you probably gained a lot with just the geographic move but how did that go over with your customer base?

John JR: yeah, well early challenges we were, you know, we were dealing with paper invoices for the most times so the conversion brought getting email contacts, moving the digital invoicing; it was a little different for customers signing handhelds when the driver shows up, so there was a little challenge beginning it really didn't last long but the benefits you know to me outweigh all the cons or the issues we had. 

Particularly with the automatic garment replacement program that we're doing and the Garment coverage because like Anthony said not only are we able to track the losses but now we can go to customers and we can explain saying "Listen, you know you have 20 shirts in inventory but 13 of the 20 haven't come back and you know that's the reason why you're having issues with your garments" and then just having that conversation with them.

What is the automatic replacement program,  it basically replaces the garments that go missing after a certain amount of days and honestly from my interaction with customers because I have been going to some customers to educate them on this program, they love it because it's alleviating the stress from their end because they're having employees you know back in the old days they have employees coming to them saying listen I'm missing uniforms and they don't really care where the uniform went, right, they don't,  that's not their headache to worry about,  you know they don't care where the uniform is but they want to know how we can ensure that they have the right amount of garments in circulation and that the guys are always dressed in uniform; so you know that's kind of separated us from our competition I would say is you know we're able to help manage your uniform service um and guarantee that what you need on hand is always there.

Eric:  yeah that's great and you know that's it's always interesting to see how customers you know how quickly they're able to adopt technology whether it's the RSR or the customer sometimes there's a little bit of hesitation but usually those things just end up moving forward and people adopt the technology naturally. I had a follow-up question because you were telling me Anthony you were telling me that preco 80% F&B today even heavy or F&B you know the F&B operators were really some of the
hardest hit at the outset of Co um it's amazing you're you're bigger today than before the pandemic what tell me a little bit of you know how what was that like for for Arrow must have been a little bit of some nervous times.

Anthony: it was pretty nerve-racking, when you see your sales drift like 95% in the week, it's kind of scary you know through the pandemic we actually did stay open till we operated I think it was the lowest I think two days week if I'm not mistaken reason being is luckily with those you know wholesale retail customers I was discussing with you before basically everyone became a retail customer for a year and a half because there was only takeout and what we were able to service our customer with was all the flatwork business so mops aprons garments customers were still using you know we couldn't operate a 72,000 foot with that so that's why we only operate you know
twice a week or three days a week.

So having that having those customers prior to the pandemic hitting and then having our routes already geared to servicing a customer that size  helped us through those challenging times and uh um kept us going and then you know as remember during the pandemic it was like there was a shutdown then there then we were open again then there was another shutdown so scaling between 100% retail routes and then it's like okay hey we're opening up outside dining oh now we got to get some wholesale routes on the road we're closing back up okay now we're going full retail so having that, you know, setup prior to pandemic and that understanding of our customer base I think helped us through the transition  and you know allowed us to come out stronger and it you know we were open so and we were servicing our customers and it did lead to some newer customers coming on just because we were able to deliver to the service that they were looking, yeah.

Eric: I always love hearing about you it's amazing how creative people can get when they have to you know and even the restaurants that you saw opening up you know special areas outside on the sidewalk or they even built small Decks that extended into the street and here in you know we're located in Dallas you still see some of those structures to this day they've just permanently expanded their outdoor seating and they never closed it down, so that was a little bit of a lifesaver for a lot of businesses.

Anthony: Yeah for sure and to your point too I mean it it kind of did allow out outside dining to stick even in the city and New York I mean it's the same thing, the city just actually rolled out a whole um outside dining program for you know how they're going to be managing the infrastructures that are outside they call it sideway Cafe dining and Road Cafe dining and there's all these different parameters and and things that customers have to have to maintain but I mean they just increased their seating area by however many feet so it's actually a help for us too and that was one of the good things to come out of covid.

Eric: for sure that's awesome yeah we're good. Any anything else that you put into this plant that you are excited about? I think I maybe even read on your website that you've got you've got solar power at this facility, is that accurate?

Anthony: yes, that's accurate I think we're on our I want to say six deer with the solar panel system I think four many remember how many powers are up there

Eric: what your experience has been with that?

Anthony: yeah, we have over 1,000 panels. The experience has been great. I mean, the install was like all installs are, I mean, you try to hope they go smooth and there's always some hiccups but working with  Power Radar and other energy companies, I got everything done. It was good and now, you know, it really does run itself I mean, a couple of inverters might go out here and there that we have to call in to get serviced on but other than that I mean it generates. It's generating a lot of energy for us and it does help with our energy our electric bill for the month.

Eric: so even though you have moved you know out to Long Island you have all the technology in the world at your disposal, there were some really unique things that you had at your Brooklyn facility. One of which was I think how you were generating power you might just sharing a little bit about that, what was going on in Brooklyn?

John: yes,  when we first bought the Brooklyn facility, it was a Cascade diaper plant and they had a water tooth boiler it was a big glow a water tooth boiler and
they had two aim steam generators. The generate would get the steam from the boiler and produce electricity that electricity was like 90% of our needs for the plant plus
we had at the time when those aim generators were outdated and was hard to get parts you actually had to get them machined um we decided to look into um code generation Diserter at the time was doing a program and they gave show a lot of lot of tax incentive so we decided to replace the boiler with a 500 CLE boiler and we decided to buy two 150 kilowatt generators and put them on the roof that would produce like 90% of our needs. That was one of the biggest technology savings and then you know of course the tole washes you know we went from conventional washes which used a lot of water and electricity to the tow washers to washes was a great rule  those are the two big technologies that we felt put us on the map, put it that way.

Eric: that's great, and even though Brooklyn's operating only as a Depot... those generators still powering on and powering that facility today?

John: well, they're there we don't use them just.

Eric: Okay, never mind, yeah

John: Because right now the only electricity that we really have is lighting and conveyors, so to stock them up and maintain them doesn't really to make sense at this point

Eric: right okay, so a couple final personal items, I want to ask each one is, you know, New York's such a great destination, and everyone's got their recommendation on something to do in New York but I'd like to ask each of you tell me something that tourist such as myself what is an unknown thing you know a Hidden Gem something to do if I come up there for the weekend what is your which favorite thing about the city or outlying area,

Anthony: oh, that's a tough one!

Eric: we can think about that for a minute and what it is though about it?

John: people that live in New York take advantage of living so close to the city and not taking advantage of what goes on in the city, you know, like tourists you know
and I guess the right way to do it is to spend the weekend in the city and just visit all you know the great things to see you know.

Anthony: a Ranger game!

Eric: so we got a hockey we got a hockey fan right

All: yeah we like the Rangers, yeah

Anthony: in the night go see MSG, is the place to go.

Eric: Okay Madison Square Garden, perfect. Okay, another question I've got is back a little bit more about you know the kind of transformation you guys have gone through, so you know what would be any advice to a similar business that's kind of, you know, hitting the ceiling, outgrowing their space and if they're considering the expansion...  any words of wisdom as they kind of embark on a similar Journey?

Anthony: might have to pass that off to the guy who bought the second building, so any learning lessons you want to give us?

John: you know, price is always a big factor but one of the most important things is to make sure to look that you pick out that your workforce could get to. A lot of people
you know, they'll find something and then they'll build something, and all of a sudden oh how we going to get our workforce here, you know, if there's not mass transit? Because not everybody drives you know in Long Island more people drive than I would say in five boroughs but mass transit, is a it's something you definitely have to look at that being number one.

Number two, you mean we felt that we have to find a building where our workflow, where the soil comes in and the clean go out, you know you
want that kind of workflow you don't want contamination from the soil being, you know, in where you're doing production you're processing or you're finishing.

And third, of course, you also need parking for all your trucks and your employees, those are like three things.

Anthony: I would say yeah I would add to I you know we go try to tour around and see the many laundries and like my dad said  the the process flow of our
laundries compared to some of the ones that I have seen is something I think people need to keep in consideration when they're purchasing a new facility
you know keeping that soil Separation on the separate side of the facility compared to where your clean is and ensuring there's a there's a flow to the way Productions running is important  and I would just say to when you're purchasing a new facility to understand the capacity restraints and what you the capacity
limits that you want to set so, you know, go into it knowing how many pounds you want to max out there and then how many pieces you want to finish on the side and how many routes you want out of there this way you could properly understand what you how much you need to fill to reach capacity at that at that plant and and kind of continue going on that aspect.

Eric: and you still have the capacity to continue to grow, is that right?

Anthony: yeah yep we have we still have the capacity in Garden City that was part of the reason why we decided to uh transition to 100% food and beverage because you know if we did have the hospitality poundage in the right now with our current size it would be a different story but um being able to focus on F&B has left us with some room to fill.

John: then another thing to a successful expansion is that you got to do your due diligence on you know on water, on sewer, on electricity, you will make sure you know that the municipalities are set up for you and they're set up for you know vice versa you know uh I mean we bought this building thinking that's the sewer treatment could handle us and like few five years later they say well we need you to reduce your TPA  so we had to put a whole waste you know we had up putting a whole Wastewater system in which we weren't expecting to do but you know you got to do your due diligence stuff.

Eric: great well I uh feel like this was just a very informative discussion I think a lot of people are going to enjoy hearing about your story we're so excited to hear about your success and I know we're going to continue to see you guys grow and continue to see all the exciting Instagram posts and,  you know, look forward to seeing the next chapter and maybe a fifth generation of Arrow Linen.

Anthony: I got a lot of hours to give to this place first yeah

Eric: so anyway, appreciate you guys thank you for joining the show, thank you!

All: thank you!