Costco founder, new CEO shares visions for company

In August 1985, local warehouse chain Costco opened up its eighth warehouse-store location in Kirkland.

Costco founder and outgoing CEO

Costco founder and outgoing CEO

In August 1985, local warehouse chain Costco opened up its eighth warehouse-store location in Kirkland.

Twenty-seven years and 594 stores later, Costco Wholesale is an international powerhouse that is, as of 2012, the seventh-largest retailer in the world.

Like Microsoft, Starbucks, and Boeing, Costco, now headquartered in Issaquah, is also a Washington homegrown company, and the Eastside can proudly boast to being the backyard of the first Costco corporate office. After partnering with Jeff Brotman, Costco founder and outgoing CEO, Jim Sinegal moved the starter business to Washington to avoid sharing the market with Price Club.

“While I considered myself a Californian and we recruited (many) people from California, there was a great community (of people) here and we were committed to staying in (Washington),” said Sinegal during an interview with the Reporter.

Renting a small office on 108th in Bellevue to act as the headquarters, Sinegal and Brotman first set up a recruiting team, then a buying team, and were able to establish a 100,000-square-foot warehouse and adjacent headquarters on the west side of Seattle. Emerging into a capital force, Costco soon expanded to consist of seven warehouses across the greater Seattle area before moving its corporate office close to the newly opened Kirkland warehouse after outgrowing its Seattle location.

And that is the start of how Costco put Kirkland on the map.

Known as the caring corporation, Costco is renowned everywhere for striving to provide the best possible quality and prices on merchandise for its valued customers. Perhaps, that is why the Kirkland Signature label has been so successful. After visiting the UK, Sinegal discovered that 50 percent of the food business was dominated by private labels programs; he would embrace this concept and expand it for Costco.

In addition to the stacked pallet of Costco’s bulk commodities, “the selective private label program would bring great value,” said Sinegal. Originally, however, the conventional wisdom in the business world was that every category should have its own private label name, but Sinegal intended to privatize all of Costco’s merchandise under one house label, an action he admits would be “a lever against major manufacturers.”

Unable to clear “Seattle Signature” as the brand name, the Costco team opted for “Kirkland Signature” in honor of the flagship warehouse at the time. Thus, it came as no surprise when the corporation decided to expand the Kirkland Signature label into the spirits market in the midst of the Prop 1183 victory.

“Our brand has such great recognition,” added Craig Jelinek, the newly-appointed CEO. “Our goal is to provide products as good as, or better, than commercial brands at a lot less money to the consumer.”

And this approach launched Costco to the stature it now stands at. According to Sinegal, the amount of success that both Kirkland Signature and Costco have received has “exceeded expectations.” Exciting things await the company at every level, with a new gas station recently opened at the Kirkland warehouse, expected sale increases from Kirkland Signature liquor, and a change of leadership.

Since grooming the company as CEO since 1983, Sinegal, who will remain on the board of directors, is stepping down from his position. When asked whether he will miss his long-held title, Sinegal replied, “I’ll be a little bit nostalgic but I’m still here, I’m not dead.”

Plus, Sinegal has nothing to worry about when he has someone as skilled and trustworthy as current President Craig Jelinek stepping up to take the reins of the corporate powerhouse.

“It’s a great honor,” says Jelinek. “I feel very blessed and privileged to take over.”

Not straying from the general vision that Sinegal created, Jelinek does have his own pursuit for Costco in mind: “That in 15 years, Costco is still growing and providing good prices for the consumers.”

That is a vision that can be enjoyed by Kirklanders, Costco employees, and everyone else alike.

Reporter intern Zach Shucklin is a recent International Community School graduate.

 


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