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Source: Washington Business Journal
The Kane Co., which operates the region's largest office moving company and a host of related ventures, is abruptly going out of business, leaving roughly 1,000 people out of work in the midst of the holiday season, CEO John Kane said Thursday afternoon.
It's a stunning development for one of Greater Washington's most venerable — and vast — privately held corporations. The company's flagship alone, Lanham-based Office Movers Inc., reported metro-area revenue of $58.1 million and 520 employees in 2015.
“It’s not a bankruptcy,” Kane said, citing an unforeseen “squeeze play” that left his company cash poor. “It’s an orderly wind down.”
Kane said he has reached an agreement with PNC Bank to wind down the businesses — Office Movers, Tech Services, Library Relocation, eCyclers, Kane 3PL, Kane Hospitality Services, Kane Distribution Services, Kane Staffing Services and Kane Freight Services — over the course of roughly six weeks. Office Archives and Office Shredding will be sold in separate transactions to unknown buyers.
The Kane Co.'s collapse has no impact on either Kane Construction Inc., owned by John Kane's brother Dennis, or Kane International Limousine Service Inc., owned by Kane's brother Richard.
The Elkridge-based Kane Co. is in contact with Maryland workforce development officials to help the impacted employees, John Kane said.
"Over 1,000 employees” are affected, he said. The company began to notify employees over the last two days.
“I’m a job creator, not a terminator,” said Kane, former chairman of the Maryland Republican Party, who, with his wife Mary Kane, an unsuccessful candidate for Maryland lieutenant governor, are fixtures of the local business community. “I’m in a very difficult state of mind.”
How did Greater Washington's largest office moving company find itself here? In the fourth quarter of 2015, Kane said, his company was scheduled to leave two leased warehouses and move into two new buildings, but one delivered two months later than anticipated and the other four months late.
Instead of temporarily renewing in its existing buildings for as long as a year, Kane said, the company spent $2 million of unbudgeted funds to rent and retrofit 200,000 square feet of temporary warehouse space — the equivalent of eight football fields.
The decision left the company “cash starved,” Kane said. He added that the pensions and 401(k)s of existing Kane employees will be paid.
The company is one of the most ubiquitous in D.C., with its red, white and blue seemingly everywhere and the logos of its related companies all sharing the same look. Kane's father, Eugene Kane, founded the company in 1969, and Kane joined in 1972 when he was 12. He worked his way through the company before becoming president in 1991, and seven years later purchased the company from his father in 1998.
The Washington Business Journal honored Kane Co. during its Family Owned Business Awards in March. At the time, Kane said he hoped to pass the company on to his children. Read our profile of the company and watch a video here.
The closure is reminiscent of another abrupt shutdown, that of Truland Group Inc. Truland, the region's largest electrical contractor, filed for bankruptcy in July 2014, laying off between 700 and 800 employees and leaving a host of unfinished jobs in its wake. It took two years to resolve the issues surrounding the bankruptcy and related lawsuits.
Will there be a Kane Co. when all is said and done? “I don’t know,” he said. “There’ll still be a John Kane.”