When three experienced managers decided it was time to run their own laundry, they had a clear idea of what they were looking for, but nothing could prepare them for the harsh realities of bringing a 19th Century family-owned business into the 21st Century.

Ron Davidson, former managing director of the Savoy Hotel Laundry, his wife Claire and colleague Kim Metcalf decided the time had come to strike out on their own.

They had become increasingly frustrated by the constant changes in the Savoy Group’s senior management. “We felt we could no longer control our own destiny, so we decided to do our own thing,” Mr Davidson says.

The result was the purchase of the Claxton Laundry in Farm Lane, London SW6. Originally established in 1906 and family-owned since the 1930s, by the time the laundry had been put up for sale, the site had been allowed to deteriorate, with ancient plant and a distinctly tired-looking fleet of vehicles.

It was just the opportunity the three new directors were looking for.

The laundry was swiftly renamed The Palace “because the plant is near Fulham Palace,” Mr Davidson explains, adding that “writer Arnold Bennett’s The Imperial Palace featured a long chapter about a laundry which can easily be recognised as having been on the grounds of the Savoy Laundry site,” he says, alluding to the 25 years he spent working for that group.

The Palace Laundry employs 26 people and the management team is headed by Ron Davidson, his wife, Claire, who also acts as financial director and company secretary, and fellow director Kim Metcalf.

They bought the plant in March 1997 for £400 000 and are now its majority shareholders. They invested a further £150 000 in the purchase of new plant and services.

“The laundry had not been cleaned inside or out for some years,” Mr Davidson relates. Wages for the staff, who range in age from 17 to 83, were very low and so too, was morale.

As a man who likes to “do it now”, he was particularly frustrated “because you feel you have to do everything right away and sometimes there are just not enough hours in the day,” he says.

The plant is on a small scale, which suited the directors nicely. “Right from the beginning we wanted to concentrate on small volumes and high quality,” Mr Davidson says.

Having set themselves the goal of operating seven days a week, this objective is now a reality, with staff working in shifts to ensure the workflow proceeds uninterrupted. Amazingly for such a small plant, the Palace Laundry is equipped with an eight-stage tunnel washer, four washer-extractors and a small 15 kg machine. There are also five tumble dryers—two gas and three steam heated—two ironers and a new shirt and coat unit.

Two drycleaning machines have also been added and a further shirt and coat unit is planned.

“I’m a great believer in belt and braces,” Mr Davidson confides. That is why the laundry has two of everything—air compressors, water softeners and soon, a second boiler.

Business has been growing apace. “Since buying the plant in February 1997, we have doubled its turnover and more than trebled the number of pieces being processed,” Mr Davidson says.

He is confident that the laundry will be able to increase its turnover by 50% this year. “Next year, I want to see us increase it by a further 30%. After that, I hope we will be looking to buy another plant.” The Palace Laundry’s customers are a mix of hotels, restaurants, small private businesses and domestic customers “very much at the luxury end of the market”.

The directors know there is a market for high quality, nicely presented and packaged work. “At our size, we are not competing with the likes of Sunlight, nor do we want to,” he says.

“As more hotels look for faster, quality service, there is a genuine need for local companies to service their needs, especially in the London area,” he says.

“We are a local service, can offer good quality laundry and drycleaning, and are situated a mere three miles from the centre of London. Customers are already noticing the difference.” Conscious of their niche market, the directors recently took the decision to reduce their field of operation to a seven-mile radius of Fulham. “That means we now operate from the City, to Wimbledon and Richmond and as far north as Finchley,” he explains.

A fleet of four delivery vans, the newest in dark grey, are enlivened by the Palace Laundry logo in white and with its motto: perfecto finis noster est (perfection is our aim).

The only downside of delivering in London is the plethora of Red Routes and a lack of parking space. That means parking fines have to be built into each day’s work.

While admitting that there is competition in his segment of the market, Mr Davidson says his team have not had to undercut their rivals. “We charge around 15% to 20% more for our services and because of the quality we are able to offer”, this, he says, has met with little resistance.

“Hotels have doubled their room rates in the last few years, but laundries dare not increase their prices,” he exclaims. “I believe that if a quality service is provided, people will pay for it. A laundry processing 50 000 items adding 1p to each item will earn £26 000/year.” Because the Palace Laundry’s volumes are small—processing around 23 000 pieces of laundry/week and drycleaning between 500 and 600 items, it does not enter into linen rental, preferring to process its customers’ existing stock.

“We do however, provide our customers with advice on the purchase of linen and optimal stock levels,” he explains.

“We’ve always had confidence in our abilities,” Claire Davidson comments. “When you own your business there is no fall-back, so there is a tendency to rely on yourself.” Regular customers have praised the ongoing upgrading of the site and the directors’ level of expertise in running the plant.