Unhappy with traditional dry cleaning and eager to run his own company, Dan Miller left McKinsey & Co. to open Mulberrys Garment Care.
To understand why Dan Miller left management consulting to start "green" dry cleaner Mulberrys Garment Care, you need to know the story about the bridal garter in his suit coat pocket.
Miller caught the keepsake at a wedding reception and tucked it away. Overlooked on the suit's next trip to the dry cleaners, it was still poking jauntily from his jacket as Miller strode into an important business meeting.
"Luckily, everybody laughed about it," recalled Miller, then an associate at the Minneapolis office of global consulting firm McKinsey & Co. "That could have been a very costly mistake."
Miller had often been dissatisfied with the service and results he'd gotten from traditional dry cleaners on the suits, shirts and trousers he wore as he advised clients on improving productivity, efficiency and customer service at their retail and service companies.
"That was the tipping point," Miller said. "So I went into my McKinsey office and told them I was taking a leave of absence to explore going into the dry-cleaning industry. Everybody looked at me like I was insane."
Yet the company, which has attracted national recognition, generated $1 million in revenue last year, with double that projected for 2011 and years to come.
Mulberrys launched in 2008. From the beginning, Miller has used a new, toxin-free dry cleaning technology that uses only pressurized liquid carbon dioxide and not the harsh chemicals found at most other dry cleaners. Today it has stores in St. Louis Park, south Minneapolis, Edina and the Byerly's supermarket in Eagan.
Dry cleaning and laundry operations are centralized at the company's headquarters in Roseville, where lab-coated employees inspect and hand-finish each garment, which is tagged with a bar code for tracking. Mulberrys has 30 employees; compensation for both production and management employees is incentive-based, Miller said, to build entrepreneurial spirit and encourage innovation.
In addition to dry cleaning, Mulberrys offers laundry service, tailoring and alterations, shoe shine and repair, and home pickup and delivery. The company also markets its own brand of detergent for home use.
Miller, who has financed the company with savings, an investment from his father and a loan obtained through the U.S. Small Business Administration, did six months of research before launching Mulberrys.
He visited dry cleaners around the country, studying best practices at leading stores and at the Dry Cleaning and Laundry Institute in Maryland and process efficiency at a UPS shipping facility.
He set a high bar for service: "The customer experience of Starbucks, the operational efficiency of Federal Express and the commitment to community of Whole Foods," as he put it.
To that end, Mulberrys offers such extras as wooden hangers, recyclable opaque plastic bags and coffee and beverages available in stores. Behind the scenes, Miller has engineered the production process to increase efficiency and keep prices competitive with traditional cleaners.
Mulberrys charges $2.99 to dry clean a shirt or blouse, $7.99 for a blazer, $9.99 and up for dresses and $13.99 for a two-piece suit. Miller said his focus on efficiency is critical to avoiding a "green" premium in his pricing.
"We put a ton of work into being efficient, protecting the environment and not charging twice as much as competitors," he said.
Mulberrys' environmental focus distinguishes it from most competitors.
Traditional dry cleaners use perchloroethylene, or "perc," as the solvent in their dry cleaning process. The chemical, regulated as a hazardous air pollutant by U.S. Environmental Protection Agency, has been shown to cause cancer in animals and is suspected of causing cancer in humans, according to the agency's website.
Mulberrys uses pressurized carbon dioxide to clean clothes. A gas at room temperature, carbon dioxide becomes a nontoxic liquid when pressurized. Clothes at Mulberrys are dry-cleaned in a special machine in a mixture of liquid carbon dioxide and detergent. Afterward, the clothes go through six rinses in liquid carbon dioxide.
The Minnesota Dry Cleaners Association, which represents 200 dry cleaners across the state, referred questions about the carbon dioxide dry-cleaning process to the Dry Cleaning and Laundry Institute, the industry's national trade association.
Jon Meijer, director of membership for the institute, said he questioned the growth potential of carbon dioxide-based dry cleaning. The machines, only 60 to 100 of which are in use nationally, are quite expensive. He also questioned the effectiveness of the process.
Phil Lombardo, vice president of sales and marketing at Lund Food Holdings Inc., said the fact that Mulberrys is a local company with a "toxin-free process," wooden hangers and recyclable garment bags all weighed in favor of adding the business to the Byerly's in Eagan.
"We toured their facility in Roseville and were very impressed by their staff and commitment to quality," Lombardo said.
Marc Ratner, a Twin Cities resident who is president of a New York company that produces high-end vintage apparel, said he appreciates the absence of a chemical smell on clothes dry-cleaned at Mulberrys and the more personal service.
"The life of my clothing isn't cut short through their dry-cleaning process," Ratner said. "The end result is it's almost better."
Setting his sights on growth, Miller would like to strengthen his Twin Cities foothold, move into another major city and then look at a national rollout.
"It's easy to tell somebody how they should run the business when you don't suffer if it goes badly," said former consultant Miller. "When it's your business, that's what really makes it exciting."
The expert says: Prof. Mark Spriggs, director of the Schulze School of Entrepreneurship at the University of St. Thomas' Opus College of Business, said he believed Miller's McKinsey background and innovative ideas in a relatively staid industry should help him be successful.
One challenge, Spriggs said, will be persuading people to switch from a traditional dry cleaners. Mulberrys will have to offer equal or better service and convenience to do so, he said, because the carbon-dioxide cleaning method alone might not be enough to get consumers to change their habits.
Spriggs said he believed that franchising was the best way to expand to other markets, with potential returns from dry cleaning unlikely to attract venture capital.