Tuesday, November 19, 2013

The 29th Largest Private Firm in NYC (That You Have Never Heard Of)

By Aaron Elstein

The diamond district is wall-to-wall squall. Hawkers line West 47th Street trying to lure people into shops and stalls. Deliverymen haul sealed containers of cash and precious metals into convoys of armored trucks. Brokers bolt from door to door, wheeling and dealing diamonds, gold and all else that glitters.

Three floors above the melee, you'll find the street's most successful merchant. His name is Max Kahan. You've probably never heard of him. But don't feel bad: Most people in the diamond district haven't, either.
"He is a very large player," said Michael Grumet, executive director of the 47th Street Business Improvement District, "and very low-key."

Mr. Kahan doesn't sell jewelry. In fact, he doesn't deal with the general public at all. His business is selling gold to jewelry makers and buying their scrap, which he melts down and sells again.

It's hardly glamorous, but the 75-year-old Mr. Kahan has been extraordinarily successful in his five decades in the business. Max Kahan Inc. is the 29th-largest New York company in private hands, according to Crain's research, and the largest of any sort in the precious-metals business. Last year, Mr. Kahan's firm generated $742 million in revenue—with just 12 employees.

"I look at his numbers, and it just astonishes me," said Michael Toback, an owner of his namesake firm, a jewelry and refining business a few doors down from Mr. Kahan. "But a lot of people buy and sell their metal through him."

Despite the clout he wields in one of New York's highest-profile industries, Mr. Kahan keeps what may well be the most spartan office of any successful businessman in the city.

His company occupies a warren of about a half-dozen cramped rooms that contain the tools of the trade, including scales and a machine to assess the purity of gold, silver and other metals. The wallpaper in some rooms is stained with years of residue from metal melting in an oven tucked in a corner. When a visitor asked for a cup of coffee, an employee had to be dispatched to a deli. There isn't even much gold to look at because most of it is locked in a vault downstairs.

A sign near Mr. Kahan's office declares that no cellphones are allowed, because he doesn't want customers to get distracted when he's negotiating with them. His conference room, consisting of a rectangular brown Formica table and six steel folding chairs, doubles as a makeshift synagogue at 2 p.m., when business halts and employees pray.

"I have nothing special to show you," said Mr. Kahan, whose company doesn't have a website. "People who come to see me already know what a kilo of gold looks like."

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