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15 Dec, 2008 04:18

Cashing in on a need to wash clothes

Self-service laundries are a common sight in most of the world's big cities. But in Moscow – a metropolis of more than 10 million people – laundromats are hard to find.

One of Moscow very few Laundromats, on the outskirts of the city, offers internet access, photo printing and a lounge to rest while waiting for your wash. The owner, Nikita Shut, says the cost of opening a Laundromat like this is around $50 thousand.

“I've doubled my revenues over this year. I think people just don't see this business niche”

Experts say, however, there is no demand for the service. In Russia the number of those who owns a property with the washing machine is higher than in the U.S. or in Europe.

But others say, lack of demand is not the main obstacle to the business.  Laundromats face a unique problem in Russia. Owners must pay a lot for connection to the electricity-grid. That can even mean financing the building of a sub-station. In addition there is a shortage of affordable shop space. So this wash will cost you around $10 – twice what you could pay abroad.

Dmitry Mantsov is the owner of an industrial laundry called ‘Blesk’, which he says is much more profitable. The number of hotels and hospitals has mushroomed in the last few years – pushing the business margins up to 17%. But there is not much competition in the market.

“Most of the industry’s fixed assets are based at soviet era assets. There is a number of industrial laundries that are located close to Kremlin, obviously it’s a very valuable sight for development/ the biggest trend in the industry right now – laundries are being bought off and closed down and developers built office centers.”

Dmitry says the future is Linen Rental Services.  He said his laundry is already leasing linen to the hospitality industry and will be one of the first to cash in on the business once it becomes popular in Russia.

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