Dry cleaners have been hanging on by a thread
Plus: Covid mortality rate falls as cases rise; SouthPark office complexes sold for $320M; Walmart workers to Johnson & Wales?; CMC vaccination protest; 2 dead in Eastover crash
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Jimmy Lee’s 5 Charlotte dry cleaners mount a comeback after sales plunged 75%; hanger shortage adds new wrinkle
Jimmy Lee has owned dry cleaning businesses in Charlotte since 1989, but he says he’s never experienced losses like the ones during the pandemic. Business is picking back up as some offices reopen and events resume, but he’s now dealing with a new challenge: a hanger shortage.
by Lindsey Banks
Jimmy Lee has seen more than one calamity in the more than 30 years that he’s been in the Charlotte dry cleaning business. There was the 1990 economic recession caused by the Gulf War, and the 2008 market crash that led consumers to pull back on non-essential spending.
But none of those compare to the losses Lee says he has suffered during the pandemic at his three Jones Dry Cleaning locations and two others he owns — Quail Dry Cleaning and Colwick Cleaners.
Lee’s dry cleaning businesses were allowed to stay open during the Covid shutdown because they were considered essential services, but sales shrank by 75% practically overnight.
It was a shock for a company that was founded in 1949. Lee bought the business and its three locations after graduating from UNC Chapel Hill in 1989, and later added Quail Dry Cleaning and Colwick Cleaners.
Industry woes: Nationwide, the pandemic caused the entire dry cleaning industry to crater. Most dry cleaners lost anywhere from 83% to 92% in sales during the height of the pandemic, Peter Blake, executive vice president of the Northeast Fabricare Association, told CBS news last summer.
Covid changed not only how we work, but the way we dress for work — from wearing pantsuits in the office to pajama bottoms during Zoom meetings. And with special events on hold for more than a year, there was no reason to opt for dry-clean-only garments over washable cotton.
Some people still did bring in items to dry clean — mainly household items like drapes and bedspreads — but it still wasn’t enough to keep Lee’s businesses operating normally. He was forced to shorten store hours and cut back on employees’ hours.
Needed relief: On the upside, landlords reacted differently. Lee said that back in 2008, landlords offered no grace period for lease payments, but during 2020, he noticed they were more lenient on extending the payment periods.
“Landlords realized the severity of the market and the condition,” he said. “They realized that if they ended up shutting businesses down, it would cost them more money to put someone back into that vacant space later.”
Dry cleaners and other small businesses were also offered government aid through the Paycheck Protection Program designed to help small businesses keep their workers on the payroll.
“Landlords actually are helping and making sure that all of the small businesses were aware that the PPP money was out there,” he said. “If you needed help, they were trying to link you to sites and everything.”
Jones Dry Cleaning received a PPP loan, and Lee said he was fortunate to not have to lay off any of his workers — something not all small businesses can say.
Signs of lingering trouble: But there are signals that business attire — and the dry cleaning industry — won’t return to normal anytime soon.
A December report from the Pew Research Center shows that more than 50% of employees would like to continue working from home after the pandemic.
Lee said he is still only operating at 70% compared to pre-pandemic business, but he’s hopeful better days are ahead.
“We foresee that when the summer ends and when public school comes back, there’ll be daycare for a lot of (children of ) workers, and there’ll be more of a norm for the schedule of people going back to work,” he said.
Today, Jones Dry Cleaning is in the process of returning its operating hours to what they were before the pandemic, and is once again seeing work attire and special event outfits coming back in for cleaning.
Hanger shortage: However, the pandemic continuing to show itself in odd ways. Prices at Lee’s dry cleaners and others around the country are up slightly and for a somewhat surprising reason: a hanger shortage.
During the pandemic, demand for hangers was low. But now that people are returning to work and businesses are operating at normal hours, the demand is increasing faster than the supply chain can handle. Because of this, Lee said the cost of shipping has increased, and the shipments are taking longer to travel overseas.
Lee said his customers haven’t complained about his prices having to rise about 4 to 5%, because most “are not as price-sensitive,” and they understand that prices are higher now on many things they buy.
Lindsey Banks, a senior at UNC Chapel Hill, is The Ledger’s summer reporting intern.
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As Covid cases rise, deaths are remaining low; ‘a very different place in terms of mortality’
As the number of Mecklenburg County Covid cases and hospitalizations continue to increase, the number of people whose deaths are attributed to Covid hasn’t kept pace to the same degree as it did in earlier stages of the pandemic.
According to data from the county health department, the number of average daily Covid cases has increased by a factor of more than six in the last month, to 288 a day in the last week. Over the same period, hospitalizations have more than tripled, to an average of 127 a day last week. Yet the number of weekly Covid deaths remains in the single digits, as it has for the last two and a half months: Four Covid patients died in the last week, data shows.
While the numbers of local Covid cases and hospitalizations have moved sharply higher in the last few weeks, the number of Covid deaths has remained steady and low. (Figures are daily averages of cases and hospitalizations reported for preceding week, and weekly number of deaths. Source: Ledger analysis of county health data)
In contrast, in the last big Covid surge this winter — before vaccines were widely available — when the number of cases doubled, the number of weekly deaths doubled, too.
That difference suggests that the latest rise in cases is leading to fewer deaths than it did in earlier stages.
Asked about lower Covid death numbers at a news conference last week, N.C. Health and Human Services Secretary Mandy Cohen said:
We are at a very different place in terms of mortality on a few fronts. One is we have treatments which we didn’t have a have a year ago. We do have monoclonal antibodies. …
We’ve also learned a lot about how to treat folks who do have severe Covid: new protocols on how to treat them, to prone them — meaning putting them on their belly — and how to use oxygen in different ways. So I think we’ve gotten a lot smarter, and our doctors have done a great job.
Overall, we have seen the mortality rate — meaning the number of people dying from Covid — going down over time. But unfortunately, you see every day our death numbers do go up, so this is still a deadly disease.
What she didn’t say, and what sounds like an obvious factor in the drop in mortality, is that the people who are most vulnerable to complications and death connected with Covid have far higher vaccination rates than the overall population. According to state data, 84% of North Carolinians ages 65+ are fully vaccinated, compared with 47% of the total population.
Since the start of the pandemic, 85% of local Covid deaths have been in ages 60+.
Despite reports that “Covid-19 patients trend younger,” there has been no increase in the number of young Covid patients dying, according to a Ledger analysis of county health data. Of the 997 Mecklenburg Covid deaths, about 2% were in ages 20-39, and less than 1% were under 20 — lower shares than a year earlier. That translates to about one Covid-related death a month of people under 40.
Of the 22 Covid patients in Mecklenburg who have died in the last two months, three-quarters were aged 60+. Health officials and local hospitals have said that more than 90% of hospitalized Covid patients are unvaccinated.
Overall, across all age groups and causes of death, Mecklenburg averages more than 500 deaths a month. —TM
Related Ledger article:
Myers Park gets back to Booty
The 20th year of the “24 Hours of Booty” charity bike ride in Myers Park wrapped up on Saturday and raised more than $1.2M to help people diagnosed with cancer. It was organized by the 24 Foundation, and the main beneficiaries are Atrium Health’s Levine Cancer Institute and Levine Children’s Hospital. The event was back in person this year after going virtual in 2020. (Photo courtesy of Brian Schindler/Brian Schindler Photography)
Two SouthPark office complexes sell for the same price that they did 2 years ago
Most of Charlotte real estate is going up, up, up, but two sales of office complexes in SouthPark last week seems to indicate that the market for office space is at best treading water.
Highwoods Properties of Raleigh completed two deals in SouthPark, and it paid almost exactly the same price for the office complexes as the seller (Preferred Apartment Communities) did just a few years ago:
Real estate records show Highwoods paid $214M to acquire Capitol Towers, two 10-story office buildings totaling 479,000 s.f. on Carnegie Boulevard, off Barclay Downs Drive. (Would it help you visualize where this is if we added that the property includes Legion Brewing?) Preferred paid slightly under $209M in December 2018. Capitol Towers was 98% leased at the end of 2020.
Highwoods also bought Morrocroft Centre, a three-building complex totaling 291,000 s.f. off Colony Road and Morrison Boulevard, on three parcels behind the SouthPark library, for $108M. Preferred paid $107.6M for the property in December 2019. It was 95% leased at the end of 2020.
Highwoods’ purchases were part of a larger deal that also included offices in Raleigh and Atlanta.
In a presentation to investors that explaining the reasoning behind the acquisitions, Highwoods said that “opportunities to acquire high-quality office portfolios of scale within the Sun Belt are scarce” and that Charlotte is a top city “for projected population growth and lower exposure to [work-from-home] risk.” In 2019, Highwoods bought the Bank of America Tower at Legacy Union uptown for $436M.
Bigger picture: As we wrote on Friday in our piece analyzing the Charlotte real estate market (“The race is on to close real estate deals”), deals for residential and industrial properties have been going like gangbusters even through Covid, while retail and office have been slower to recover.
While some big employers such as Duke Energy and Atrium Health have announced big cutbacks in office space, office brokers are generally upbeat about the prospects for growth locally because of new job creation and relocations.
“Just look at the year that Charlotte had last year with economic development, and you can understand why people are not worried,” says Parker Melvin, an office and industrial broker with Eagle Commercial Realty in Charlotte. After years of tight office supply and ever-higher prices, the effects of the pandemic mean that Charlotte is “getting back to a healthy supply and demand balance,” he said.
➡️ In another office deal, Crescent Communities sold the new Ally Charlotte Center to Ally for $390M, real estate records show. It’s a 26-story, 750,000 s.f. building at South Tryon and Stonewall streets uptown, with Ally as the main tenant. —TM
Walmart strikes tuition-free deal with Johnson & Wales
The Charlotte campus of Johnson & Wales University could soon have a new group of students: Walmart workers attending classes tuition-free.
Walmart, which is the Charlotte region’s third-largest employer, announced last week that it would pay the full price of tuition and books for its workers at 10 participating universities, including Johnson & Wales.
Angelo Pitassi, who runs corporate business development for the university, says JWU benefits from the potential for increased enrollment and becoming even better-known in the community. Walmart workers are able to participate in Johnson & Wales’ program on operations and supply-chain management.
He said the university has no estimate on the numbers of workers who might participate but that “we are expecting high volumes of activity.”
More links between companies and colleges: Pitassi said corporate partnerships with universities are a growing trend, with companies recognizing the importance of increasing the skills of their employees: “We are seeing employers really take the time to research the tuition benefit opportunities for their employee base and offer a tuition-free option. It’s a tremendous opportunity.”
Johnson & Wales struck a similar deal in April with Chipotle Mexican Grill, in which workers can receive degrees in culinary arts and hospitality.
Walmart has an estimated 16,000 Charlotte-area workers, according to the Charlotte Business Journal Book of Lists. Johnson & Wales has online courses plus campuses in Charlotte and in Providence, R.I. Its Charlotte enrollment is around 1,300. —TM
Healthcare protest: About 1,000 healthcare workers and their supporters rallied in front of Atrium Health’s Carolinas Medical Center campus on Sunday to protest new requirements from Atrium and from Novant Health mandating vaccinations for all workers. Signs included “Patients can choose — Why can’t we???” “Naturally immune lives matter” and “My body! My choice!” (WBTV, Ledger on Instagram)
Two dead in Eastover crash: Two people were killed and two others were injured in a crash early Sunday on Colville Road in Eastover. Medic said two people died at the scene. There had been no other information released as of this morning. The fatalities are said to be recent Myers Park High grads, according to social media chatter. (WBTV)
The only item on tonight’s City Council agenda: “Charlotte Non-Discrimination Ordinance.”
Suburban lifestyle: Builders and real estate agents say demand is growing in the Charlotte area for the “suburban lifestyle,” particularly from “relocating employees of companies expanding or moving to the area.” “People do not want to be on top of each other and in the city,” said one real estate broker developing $1M-$2M homes in Union County. “They want privacy and to be outside of the city.” (Biz Journal, subscriber-only)
Less money for CLT: Revenue at Charlotte’s airport fell more than 19% in 2020, to $216M, with the number of passengers plunging by 57%. Parking revenue, which is typically the biggest source of money, dropped 62%. (Observer)
More evictions on the way: Eviction filings are expected to rise, as a federal moratorium on evictions expired Saturday. (WCCB/AP)
A profile of a top Charlotte banker: Kieth Cockrell, Bank of America’s new Charlotte market president, was raised by his grandparents in New York and has a daughter competing in the Tokyo Olympics. (Axios Charlotte)
Cornhole championships: The Rock Hill Sports & Events Center is hosting the American Cornhole League World Championships starting today. It’s going to be a “huge week with nonstop action,” a league spokesman said. Top prize: $25,000. (CharlotteFive)
Here come the pumpkin beers: At least four Charlotte breweries are releasing pumpkin-flavored beers in the next month. (Charlotte magazine)
Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:
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