| Net Worth: | $1.2 billion |
|---|---|
| Profession: | Businessman |
| Date of Birth: | 1936 |
| Country: | United States of America |
About James Sinegal
Sinegal saw early on that customers were eager to buy both the bulk commodities often associated with bargain warehouses and the higher-end consumer goods he stocked. Pallets of seemingly random goods did not set off customers, who instead found the assortment appealing. Items like lawn chairs, cashmere scarves, and giant rolls of paper towel might be found in a typical Costco haul. Sinegal kept markups at a reasonable 12-15% by minimizing expenses such as sales staff, retail fixtures, and backup inventories. Some members of the business press have termed this devoted clientele “the cult of Cost-co.” thanks to the wholesaler’s mix of low pricing and high quality goods.
Sinegal learned the ropes from Sol Price, who many people call the “father” of the warehouse club idea. Sinegal is famous for his generous management style, which is based on the idea that happy workers will provide happy consumers with excellent service. Sinegal, through Costco, offered pay and benefits that were well above the standard for the retail industry to all of his employees. Over 90% of Costco’s employees, for instance, are covered by the company’s health insurance plan, while only around 60% of retail workers in the United States are offered such coverage. So, Costco boasts the lowest staff turnover of any major retailer.
His first job out of college was with Sinegal/Chamberlin and Associates, a food and non-food product broker and sales representative firm, where he stayed until 1983. The first Costco store was opened by Sinegal and attorney Jeffrey H. Brotman in 1983. Over the years, the company expanded fast, eventually becoming a household name and retailing powerhouse. Sinegal remained an integral part of Costco’s leadership for many years. Sinegal believed it was important for Costco’s strategy to be customer-centric.
Sinegal was the president and CEO of Costco from 1983 until his retirement on December 31, 2011. Sinegal was famous for personally inspecting all of the company’s locations once a year during his tenure as CEO. The improvements introduced by Sinegal enabled Costco the first “warehouse club” to sell such diverse items as fresh food, eye care clinics, pharmacies, and gas stations.
In 1993, when competition was beginning to hurt both Price Club and Costco Wholesale, Sinegal was invited to a partial merger. After Price’s earnings dropped by 40%, the two companies merged in part. PriceCostco, Inc., the new company, has opened stores in Mexico, South Korea, and England, all with an emphasis on global expansion. Despite a lot of hard work to turn things around, sales just kept falling. When discussing the future of the company and potential avenues for recovery, Robert Price and Jim Sinegal came to opposite conclusions. In 1994, the couple officially announced their separation. The new business venture founded by Price is called Price Enterprises. Although he stepped down, Sinegal maintained control of PriceCostco.
Sinegal rebranded his company as Costco Wholesale in 1997. According to a 2012 CNBC program, the value of the shares soared by 5,000% from 1985 until Sinegal’s retirement. The two years that Sinegal oversaw as CEO were the two best years for Costco’s bottom line.
After the previous owners backed out at the last minute, Sinegal and two other local investors put up $450 million to buy the Seattle SuperSonics NBA franchise and renovate KeyArena in 2008.
Ultimately, the effort was unsuccessful because NBA commissioner David Stern had already struck a secret deal with an Oklahoma-based ownership group to relocate the club to Oklahoma City (where it was renamed the Oklahoma City Thunder).
The Washington Post reported in 2011 that Sinegal never let his success change him. He was only pulling in roughly $350,000 a year, or less than a third of what the average CEO in the country pulls in. His 2010 salary was significantly lower than that of many CEOs, at $3.5 million. He was extremely committed to his team, and he avoided laying off any permanent employees during the recession.
Sinegal is a committed Democrat and he gave a speech at the Democratic National Convention in 2012. Sinegal has twice welcomed President Obama to his residence. Sinegal and his wife Janet are the proud parents of three kids. David Sinegal now runs the family business at the St. Helena winery he inherited from his father.
Sinegal stepped down as CEO of Costco Wholesale on January 1, 2012, but he remained with the company as an advisor and director. He was followed by his longtime colleague and fellow Costco employee W. Craig Jelinek.
In June 2017, Sinegal was one of several recipients of an honorary doctorate from Dartmouth College. Other recipients were Jake Tapper. In January of 2018, Sinegal stepped down from his role on the Board of Directors.
