The Palm Springs, Calif.-based owner of Young Laundry, Hawai'i's largest retail and commercial dry-cleaner and laundry, wants to take the company public and use proceeds from the share sale to expand on the Mainland and locally.

U.S. Dry Cleaning Corp. wants to sell 2.5 million shares for between $2.25 and $2.75 each, according to a filing at the U.S. Securities and Exchange Commission last week.

Young Laundry, which currently makes up most of U.S. Dry Cleaning's operations, would serve as the model for expansion as the company takes the "hub-and-spoke" structure and replicates it in other markets, the filing shows. Young Laundry operates 13 retail locations and serves about 35 hotels, which funnel their dry cleaning and other laundry needs into a central processing location on Auiki Street in Kapalama. U.S. Dry Cleaning sees an opportunity to build other regional operations that serve one or two retail brands.

U.S. Dry Cleaning was formed in 2005 and 17 months ago merged with Young Laundry, which was founded in Honolulu in 1902 as the in-house laundry for the Alexander Young Hotel in downtown Honolulu. Mike Drace, who oversees Young and serves as president and chief operating officer of U.S. Dry Cleaning, said the company is now in a "quiet period" as the SEC reviews its filing and that he could not comment.

The filing shows the company hopes to capitalize on the mom-and-pop nature of the dry cleaning business and achieve efficiencies through economies of scale and introduction of management practices not currently found in the dry-cleaning business.

Robert Lee, U.S. Dry Cleaning chief executive officer, has experience in the video rental business, having opened, acquired or operated more than 500 stores.

"We believe that the dry cleaning industry is entering a consolidation phase as older proprietors and recent inheritors seek to convert their investments in longstanding businesses," the filing said. "The industry is very fragmented with 85 percent of the dry cleaning operations family-owned and operated without the benefit of professional management or access to efficient capital."

Currently the bulk of U.S. Dry Cleaning's operations are in Hawai'i, where it operates 13 retail locations and a 23,000 square-foot plant. It also has six locations around Palm Springs and is in the process of acquiring 10 locations in Riverside, Calif.

According to the International Fabricare Institute, a dry cleaning industry organization, there are about 30,000 dry cleaners in the United States, many of which are single-location "mom-and-pop" operations. U.S. Dry Cleaning, citing estimates from IBIS World, said the entire U.S. dry cleaning business generates about $9 billion in sales annually.

The company will raise about $5.5 million if shares are sold for $2.50 each and $750,000 is subtracted to pay the expenses of sale underwriter Marino Capital Partners Inc. Marino also has the option to sell as many as 500,000 additional shares to cover excess demand.

U.S. Dry Cleaning would target market-leading operations within certain markets for acquisition. Additional fill-in purchases would be made within the same area to help keep a production facility busy, the filing said. This includes more locations in Hawai'i.

The filing said U.S. Dry Cleaning had a net loss of $5.9 million in the year ended Sept. 30, primarily because a fire at its Coachella Valley processing plant forced it to outsource its work. The company intends to lease production facilities in the Palm Springs /Riverside area as a replacement facility.

Revenue for the 12-month period was about $6.08 million.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.