As a business, Celtic Linen is no stranger to battling hardship. The Covid-19 pandemic is just providing a fresh range of challenges for the company to overcome. However, the firm’s CEO Donald Campbell is focusing on the opportunity coming out of this crisis – and what he and his employees can do to help the national effort in stopping the spread of the virus.

The commercial laundry and linen rental business serving the healthcare and hospitality sectors supplies and laundering scrubs and linen for hospitals across the country. At this time of year, the company would usually supply 4,000 scrub suits a week. This has increased to 10,000, which are being dispatched to facilities in Wexford, Dublin, Mayo, Tipperary and Donegal among other places. Celtic Linen is also supplying and laundering increased volumes of sheets and other items needed for patient care.

“We process roughly 8,000 to 10,000 items of linen and hour,” says Campbell.

He believes that his company is among indirect frontline workers, taking in hospital linen to be laundered from healthcare facilities that have been infected with Covid-19. It is a crucial link in the supply chain for Irish hospitals in their darkest hour.

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This is not the first time the 96-year-old Wexford-based company needs to navigate a difficult business environments, having gone into examinership in October 2016.

“The company in the early 2000s had consolidated three laundries into one, and it heavily invested in that new laundry. Unfortunately, then what came around the corner was a hefty economic crash which really dealt a bit of a blow financially to the company over the next five or six years,” says Campbell.

He recalls a number of financial burdens pushed Celtic Linen into examinership. An accumulation of debts during the crash, as well as other leaner laundries getting a foothold in the market, all contributed to the company getting into trouble.

However, the private equity fund Causeway Capital stepped in and bought the company out of examinership in December 2016. Since then, the fund has invested a total of €10 million in Celtic Linen.

CEO of Celtic Linen Donald Campbell.

“Under Causeway Capital’s ownership we’ve resurrected the brand and continued to grow our turnover, both in hospitality and healthcare linen rental,” says Campbell.

“The Wexford area had been seen as an unemployment blackspot,” he adds. He believes this is one of the main reasons that Causeway Capital invested in the business. Campbell says the fund and its own investors including AIB, The Irish Strategic Investment Fund and the European Strategic Investment Fund, are interested in supporting indigenous businesses in what high-unemployment locations.

“What coming out of examinership did, via Causeway, was it saved about 300 full-time jobs in an area that these jobs are really important to,” says Campbell.

Celtic Linen’s laundering and supply business model is broken down into two separate parts, its hospitality and its healthcare production lines. They need to be separate as the healthcare business requires Celtic Linen to have specific bio-hazard decontamination standards. Therefore, all the laundry can’t be mixed. There are only two companies in Ireland that are validated to supply hospital-standard linen – the other one is Elis.

Celtic Linen has 400 customers across the hospitality and healthcare sectors.

Hospitality business decimated

The majority of Celtic Linen’s revenue usually comes from the hospitality business. It was the reason it acquired the Millbrook Linen laundry in Naas, Co Kildare, formerly owned by the Sheridan family. Campbell wanted to be closer to Dublin while the hotel market was rising. He says it was part of “the company’s strategic goal to grow turnover.”

“From the hospitality point of view, as the economy was growing and hotels were getting built, they needed laundry provision to support the growth of the new rooms and hotels around the country,” he says.

“The tourism industry needs hotel rooms and hotel rooms need laundry provision.”

With lockdown restrictions in place, the hospitality market is currently frozen and supplier businesses such as Celtic Linen suffer the consequences.

Celtic Linen’s Wexford laundry.

“As you can imagine at the moment, the hospitality business has been completely decimated as a result of Covid-19 and that’s really driven by the distancing and the closure of hotels around the country,” says Campbell.

This has left Celtic Linen with 120 to 130 healthcare customers. These range in sizes from the largest public hospitals in the country to some smaller nursing homes and care units.

Campbell says: “With the hospitality side we’d be doing twice that much at this time of year” – one of his firm’s busiest given the seasonality of the hospitality business.

“We want to be as busy as we can be. We have plenty of capacity to be able to take any upsurge in volume as a result of Covid-19, but paradoxically we don’t want to be busy because it implies that the virus is wider spread than what we would want.”

Donald Campell

The Wexford and Naas laundries are now closed because the hospitality business has dried up. This means that 160 staff had to be temporarily laid-off.

The company retained around 90 staff for its current operations. Some of these are long-serving staff members, part of two or three generations of family members working for the healthcare side of Celtic Linen.

Healthcare production line gives clarity on the surge

Although we are in the midst of a global pandemic, the healthcare piece of Campbell’s business has been hit by the impact of Covid-19. He says that line volumes for Celtic Linen’s healthcare clients are at about 85 per cent of where they were at previously.

“Hospitals have been vacating beds in anticipation of more Covid-19 patients. That has meant our volume has dropped in normal day-to-day products such as bed sheets and pillowcases and blankets,” he says.

On the other hand, Celtic Linen is experiencing a huge increase of 152 per cent in the provision of scrub suits to the hospitals.

One of Celtic Linen’s hotel clients is now using its healthcare supply and laundering service. The Citywest Hotel in Dublin is being used as a self-isolation facility for those infected with Covid-19.

Celtic Line supplied 12,000 items into Citywest but only received 1,000 items back to be laundered, indicating there is a low number of patients using the facility.

Campbell anticipated the presence of the virus in Ireland as early on as January and assessed the risk to Celtic Linen as a result of the pandemic. By March, he had secured an additional €1 million worth of linen to prepare for the rise in people filling the capacity of healthcare facilities.

The surge, though, is yet to arrive in Ireland.

“We want to be as busy as we can be. We have plenty of capacity to be able to take any upsurge in volume as a result of Covid-19 but paradoxically we don’t want to be busy because it implies that the virus is wider spread than what we would want,” says Campbell.

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While continuing its healthcare production line operations, Campbell says social distancing has been the biggest challenge work-wise for Celtic Linen. Its service is being done at a slightly less efficient rate than usual because of this.

Despite the twin challenges of losing the hospitality side of his business while managing change to the other half of the company, Campbell is optimistic about the future of both.

The hospitality market will open up once more. Celtic Linen “stands willing, able and ready for that call when it comes,” he says.