Few outside the world of steam-ironing will know of Johnson Group Cleaners. Yet with 750 shops in the UK and 350 in the United States, it undoubtedly leads the battle against crime. By Charles Darwent.
Rather like discovering that one's cocktail party interlocutor is a psychiatrist, there is something undeniably disquieting about talking to a man whose business is personal hygiene. Terry Greer has a way (entirely unintentional) of making you feel, well, dirty. It is not simply that the chairman of Johnson Group Cleaners plc's own suit is a model of cleanliness and knife-pleating: it is more his breadth of knowledge of life's various insanitarinesses. "Do you know that the Americans spend an average of £22.00 a head on dry cleaning each year?" he asks, sweetly. "The British only spend £7.00." Has he noticed that egg stain on the sleeve? The shiny bit reflecting from the seat of the trousers?
Such insecurities have made Terry Greer chairman of what is - perhaps surprisingly, given the British penchant for uncleanliness - the world's biggest dry cleaning firm. Johnson now owns some 750 shops in the UK, as well as a growing chain, at present numbering 350, in the United States. The group's turnover for the year to December 1990 was an impressive £149.4 million, with operating profits of a rather less stunning £18.5 million. This, Greer points out, in a year which was the dry cleaning equivalent of something rather nasty from the Old Testament: deep recession in both the US and UK markets, combined with the dry cleaner's enemy - unseasonally hot weather - on either side of the Atlantic. But for these, Johnson's burgeoning acquisitions policy in the US would have left Greer as group chairman of an even larger outfit, an undisputed Saladin in the battle against grime.
And yet few outside the arcane world of steam-ironing and ethyl solvents will ever have heard of JGC. Ask even the most well pressed business journalist to name the UK's largest dry cleaning firm, and odds are that he will offer the name of Johnson's rather smaller competitor, Sketchley. The reason for this anonymity is historical. Take your "recherche" Bill Blass to Bollom's in Bristol and it is a Johnson operative who will clean it up for you. Up-end designer beer on your ventless Paul Smith jacket in Exeter and it will be removed by your friendly local Kneel's (aka Johnson's). In all, JGC's holding company operates under 11 different trading names, only one of which - in Liverpool and the North-west - happens to be Johnson.
"When Richard (Zerny) became UK managing director 18 months ago, we held a full meeting of the board to discuss the whole question of acquiring a national trading name," says Terry Greer, "and our conclusion was, once again, that there was no particular point. There might be economies of scale to be achieved in terms of, say, packaging, but you have to consider the other side," he adds. "Dry cleaning falls into the category of begrudged expenditure. People by and large don't say 'Hooray! let's go to the dry cleaners'. What they want is not the best, but the least bad, and that means the nearest. People aren't going to walk an extra half mile just because you have a national trading name."
There are, it seems, other advantages to corporate anonymity. One is that JGC's various sub-entities can, in spite of their partnership in the behemoth, claim local advertising rates, leaving head office in Bootle with a pleasingly slim publicity spend. As much to the point, however, is the fact that leaving JGC's integral parts with their own names adheres to Greer's own corporate philosophy. "The real trick about the dry cleaning industry is that it can't be run successfully as a big business," avers Greer, mysteriously for a man at the helm of a £150-million-a-year concern. "People have tried, and failed. Far be it from me to criticise Sketchley" - JGC's ex-Sketchley group chairman struggles to suppress a dry-cleanerly grin - "but their troubles have made headlines, and are largely, in my opinion, caused by too much centralisation."
Greer's own label for JGC's corporate format is "multiple cottage industry". Of Johnson's 750 UK outlets, the majority have been acquired by direct purchase rather than through organic growth. In many of these, says Greer, extant management, with its knowledge of the locale, has been left in place post-purchase. "Our aim is not to buy lame-duck outfits and turn them round," notes Greer. "We tend to go for outlets that are already well and profitably run. So if we're already getting good management, why shouldn't we keep it?"
He and Zerny are insistent that Johnson's acquisition process is "100% friendly". Indeed, Zerny is himself a case in point, his own familial dry-cleaning empire - the Hull-based Zerny's - now comprising part of JGC's multi-named structure. The logic of all of this is straightforward. By far the largest single cost in operating a dry cleaners is people, wages consuming something over a third of any annual budget. Ergo, keep your employees happy and, to a degree perhaps unparalleled in any other comparable industry, you will prosper.