Co-Founder of Costco and Kirkland Signature Brand to Retire

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September 6, 2011

James Sinegal, the man credited with building Costco Wholesale into the nation’s third largest retailer and seller of many of the most respected store brands, is relinquishing his top spot as CEO. Current President Craig Jelinek will take over the CEO reigns Jan. 1, 2012.

Sinegal, however, will continue to serve on the board of directors and spend a year in an advisory role during the leadership transition.

Sinegal helped found Costco in 1983 in Seattle, along with Chairman Jeffrey Brotman. The warehouse club moved its headquarters four years later to nearby Kirkland, Wash., from which the retailer’s Kirkland Signature brand gets its name. Today the chain has nearly 600 club stores with annual revenues of approximately $78 billion, and a Kirkland Signature private label product in nearly every category it sells.

Sinegal, 75, leaves the company to Jelinek, a man who joined Costco as store manager in one of the chain’s first locations in 1984. In February 2010, Jelinek was named president and COO and was clearly Sinegal’s heir apparent. Analysts are largely unbothered by the prospect of the transition as Jelinek’s view for the company dovetails with its founders, and growing store brands will likely remain a critical strategy and point of differentiation for Costco.

Craftsman at Costco
In other Costco news, Craftsman hand tools, power tools and tool storage units started appearing on Costco shelves Labor Day weekend, Sears told the Chicago Tribune. Craftsman tools will roll out to all of Costco U.S. stores this year, with the assortment varying by location. Costco won’t have access to the entire Craftsman line of tools, and will offer bundles of merchandise to better distinguish the selection for Costco stores.

Costco has largely relied on national brands in hardlines, and Craftsman should help distinguish the retailer in this category.

Costco is the second retailer granted permission to sell Sears’ Craftsman brand. Last spring Ace Hardware began selling Craftsman tools at a few hundred stores and will expand to 1,000 locations by fall.

James Sinegal photo courtesy of the Seattle Times.

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• Costco to Expand Kirkland Signature Consumables

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