Costco names apparent heir to CEO Sinegal

After years of refusing to answer questions about succession, Costco Wholesale promoted Craig Jelinek in moves that appear to make him the heir apparent to CEO Jim Sinegal.

There is no indication Sinegal plans to retire soon, but Costco's board promoted Jelinek to president — formerly Sinegal's title — and chief operating officer. He also joins a newly formed office of the president that includes Sinegal, Chairman Jeff Brotman and Senior Executive Vice President Dick DiCerchio.

And he joins the board of the country's third-largest retailer. Other members include Charlie Munger, vice chairman of Berkshire Hathaway; Bill Gates' father William H. Gates; and Ben Carson, director of pediatric neurosurgery at Johns Hopkins University. Analysts applauded Jelinek's promotion from executive vice president of merchandising, a role he's had since 2004.

The news "should ease investor concerns about a management transition when Jim Sinegal decides to step down," David Strasser, a retail analyst at Janney Capital Markets, wrote in a research note Tuesday.

He does not expect big changes with Jelinek, 57. Sinegal turned 74 last month.

"This could disappoint some investors who had hoped that the new management would quickly look to raise margins and drive earnings growth," Strasser wrote. He likes the choice, saying the current strategy and culture maintains Costco's long-term value and its standing as one of the world's best retailers.

Costco stock rose 86 cents to $58.77 on Tuesday. It has traded between $38.17 and $61.25 over the past year.

Sinegal said last fall he has no plans to retire.

"Being very, very agile with the numbers is a very important element of the business, and being able to go out and travel and visit the warehouses and make sure you go to every opening," he said. "I'm healthy and enjoying things and still working hard and reasonably adept at what I'm doing."

Jelinek has overseen Costco's merchandising at a time of rapid growth — net sales grew from $47 billion in 2004 to $70 billion last year — that has brought the chain major clout with manufacturers.

Last fall, it pulled Coca-Cola products from shelves in an unusually public tiff that included signs on Costco shelves saying it wouldn't carry products at uncompetitive prices.

A month later, the two had made up and Coke was back in Costco.

Jelinek grew up near Los Angeles and worked through college for Fed-Mart, a discount chain founded by Sol Price, who later started Price Club. He was operations manager for its Los Angeles division when Fed-Mart closed in the early '80s.

In 1984, he joined Costco and opened its sixth warehouse, in Tukwila, before helping open many other warehouses in Nevada and California.

"The mid-'80s were probably the most challenging years of my career," he said in an executive profile that was last updated in 2008. "We were expanding rapidly, but didn't yet have many central support departments, so I had to wear a lot of hats."

His roles included running operations, working with warehouse managers and architects, and attending city council meetings.

In 1993, when Costco merged with Price Club, Jelinek took over the Northwest region. In 2004, he became executive president of merchandising, a role he held until this week's promotion.

Jelinek earned $2.9 million from Costco last year, according to a securities filing. Sinegal earned $3.4 million.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com