- The Washington Times - Monday, May 28, 2001

John Kane has three hobbies: golf, good cigars and growing business. As the president and chief executive of the Kane Company, that last hobby has been giving him the most satisfaction.

His company's growth to the tune of about 15 percent per year, he says stems from the success of all of the Kane Company businesses, which include commercial moving and office furniture sales and installation, office archives and a third-party logistics company called Kane3PL.

The Washington Times sat down with Mr. Kane in his spacious office at the Kane Company headquarters in Elkridge in Howard County, Md. Dressed like an executive in a black suit and tie, Mr. Kane talked at length about the one thing that all of the Kane Company businesses have in common: the customers.

"When I first came here we were a freight company, we were a limousine and bus company, we were a container hauling business and we were a commercial moving company," says Mr. Kane, a 40-year-old father of three.

"The thing I realized was that the one denominator that didn't ring true for all those business units was the same customer." The challenge, Mr. Kane says, was trying to sell customers more than one of the company's services.

In the last five years three of those with Mr. Kane at the helm the Kane Companies closed the freight company, sold the container hauling business and spun off the limousine and bus business. The office archives and third-party logistics business, which helps with things like delivery and process management, were added. The idea was that customers would be inclined to go to the same company for several different services.

"The sales folks like it when they have more things to sell," Mr. Kane says.

Mr. Kane says he expects $60 million in revenues this year, about half of which will come from the commercial moving businesses, Office Movers Inc. and Office Installers Inc. In the past year, Kane3PL has been growing at a "very, very quick pace," Mr. Kane says, due to its involvement in helping telecommunications companies deliver and install fiber optic lines.

Tough times

This success comes at a time when the moving business as a whole is slowing because of a sluggish economy.

"When companies move from a larger to small space, they remain more cost-conscious," says Ed Katz, President of the International Office Moving Institute. "This is a tough, tough business. It's one that's labor- and capital-intensive."

Mr. Kane says the slow economy is actually helping his company, because struggling businesses will be forced to move in and out of office space.

"We tend to do OK in a growth swing or downfall," Mr. Kane says. "We tend to do not OK when things are holding pat."

The commercial moving industry is plagued by high employee turnover and attrition. Some industry observers say it can be up to 80 percent.

"The attrition in this industry is horrific," Mr. Katz says.

But the Kane Company appears to be bucking the trend. Last year, it claimed an 18 percent turnover rate in part due to the use of part-time and military personnel.

At one of the Kane Company's biggest competitors, JK Moving and Storage, employee attrition is also low because of a lucrative pension and profit-sharing program it has in place.

Kane3PL has helped the Kane Company expand geographically; it now does business in far-reaching cities like Dallas; San Diego; Portland, Ore., and Seattle.

Despite the growth and expansion, Mr. Kane dismisses the notion that the Kane Company is a large, sprawling enterprise.

"We don't really consider ourselves a big business," Mr. Kane says. "We consider ourselves a lot of small businesses."

Mr. Kane maintains that he is more interested in making profits than acquiring other businesses, adhering to the "buying is vanity, profit is sanity" slogan that he has placed on his office desk.

Also sprawled throughout his office are cigar magazines and other knickknacks that provide the feel of a living room.

"I don't mind quietly working in the background with very low employee turnover, making 12 cents on the dollar and earning 15 percent a year growth," he says. "That's good business."

Spread thin

Mr. Kane is optimistic that his company can succeed with numerous businesses under one umbrella. But industry observers are skeptical, saying that the businesses are not all that similar and require completely different groups of workers.

"It's a trend, and bigger usually means less control and lower quality service," Mr. Katz says. "It's great to have it all under one umbrella, but it's not the same labor."

Mr. Katz says a philosophy of having one customer makes sense, but that Mr. Kane must be aware that the businesses he runs are otherwise all quite different.

"All these cliches sound great, but most managers have a heck of a time managing all those businesses," he says. "He could be unique. If he's great at managing these types of people, more power to him."

The Kane Company's strongest competition comes from JK Moving and Storage, a Sterling-based company offering many of the same services, which pulled in $38 million last year.

"I do see [having diversified businesses] as an advantage, and most of us are providing it," says Charles Kuhn, the company's President and chief executive.

Most van lines offer stiff competition in the moving industry, while Iron Mountain, Inc., a global records and information management company, is the Kane Company's largest competitor in the archives business.

Mr. Kuhn echoes that sentiment and says that the only thing hurting his business is the small number of clients who have declared bankruptcy.

"I've been through a few recessions in this industry and typically, they have no effect on us," Mr. Kuhn says. "The business is clearly there."

Mr. Kane remains active not only as a business leader but civic activist. As a member of the Greater Washington Board of Trade's transportation and environment committee, he has lobbied hard for a "Techway" bridge that would link Interstate 270 in Maryland with Northern Virginia, thus cutting down on commute times and easing gridlock.

Mr. Kane commutes to the Kane Company headquarters from Potomac (he lives next to the Tournament Player's Club at Avenel), a drive that normally takes him over an hour.

Though an enemy to many environmentalists, he has championed the cause of ending traffic congestion in the region. He has not counted out running for political office once he retires. All of this keeps Mr. Kane busy enough that he can only squeeze in nine holes once in a while.

"My handicap has not gone down in the last three years," Mr. Kane says. "I often say my father sold me his business to keep me off the golf course and off the campaign trail."

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