WHAT IT MEANS AND WHY IT'S IMPORTANT — While news media fret over what effect Steve Jobs' departure from Apple will have on that company, it's clear that Jim Sinegal is leaving Costco Wholesale in capable hands as he prepares to step down as CEO and hand leadership over to president and COO Craig Jelinek.
(THE NEWS: New leadership era begins at Costco. For the full story, click here)
It's no surprise that when Sinegal, who cofounded Costco with chairman Jeffrey Brotman in 1983, announced his plans to retire, the company posted strong fiscal-year and monthly sales results on Aug. 28. The mass-merchandise club retailer has managed to deftly pull itself through the economic crisis and subsequent weak economy over the past three years. To say that Sinegal gave the company his best effort would be an understatement: As Barron's magazine reported in March when it named him one of the 30 best CEOs, after a trip to Asia to look for places to open new stores, he landed near Costco's Issaquah, Wash., headquarters, took a quick shower and was in the office by 9 a.m.
Over the last 28 years, the company has distinguished itself with a corporate culture that has set it apart from most mass merchandisers, but also made it a pioneer. Instead of category management, the chain focuses on "item management" that allows it to turn any SKU into an overnight sensation. The company also has distinguished itself as an employer, offering generous benefits packages to employees ranging from salaried executives to part-time workers in the stores.
Jelinek, who has worked for the company since a year after its founding, plans to keep that culture intact, meaning that while Sinegal's planned Jan. 1 departure may mark the end of an era, the next era won't differ too much from the last one, and that's probably a good thing.