Costco CEO Jim Sinegal to retire
Issaquah, Wash. — Jim Sinegal, the much-admired CEO and co-founder of Costco Wholesale Corp., plans to step down effective Jan. 1. The chain said its board has elected the company’s current president and COO, Craig Jelinek, to succeed Sinegal.
“Costco has a very strong culture and a deep bench of management talent," said Sinegal. "I have total confidence in Craig’s ability to handle his new responsibilities and feel we are fortunate as a company to have an executive of his caliber to succeed me as chief executive of Costco."
Sinegal will remain with Costco through January 2013, serving in an advisory role and assisting Jelinek in the transition. He will also continue to serve on the board of directors and will stand for reelection at the January 2012 annual meeting.
Sinegal, considered one of the more colorful and admired persons in retailing, is known for his integrity, and for putting his employees and customers above Wall Street pressures. During the recession, Sinegal held tight, and Costco did not lay off any workers, with the exception of seasonal workers and extra people hired for new-store openings. It also refused to cut back on health benefits.
According to a report in The Seattle Times, Sinegal decided to retire partly because of his age, he will turn 76 on Jan. 1, and because Costco is in good shape.
"This is a positive move for Costco, and I feel very good about it," he told the newspaper. “"Everybody says that, and it sounds like a lot of bull, but I mean it."
Jelinek started as a Costco warehouse manager in 1984. He has served in every major role related to Costco’s business operations and merchandising activities. Since becoming president and COO last year, Jelinek has accompanied Sinegal to the opening of every Costco warehouse in the world, The Seattle Times reported.
Pier 1 continues to bring strong comps home
FORT WORTH, Texas — Pier 1 Imports reported a 10.8% same-store sales increase for the second quarter ended Aug. 27, on top of an 11.2% comps increase for the same period last year, driven primarily by increases in traffic and average ticket. Total sales for the quarter improved to $340 million compared to $310 million in the year-ago quarter.
Pier 1 said it expects earnings per share for the quarter to be 14 cents.
For the first six months of the year, comparable-store sales for the first six months increased 10.5% compared with a comparable-store sales increase of 12.7% in the year-ago period. Total sales for the first six months increased to $674 million from $616 million for the same period last year.
Alex Smith, president and CEO, commented, “We are very pleased with our second quarter sales results, which were consistent throughout every month of the quarter. Merchandise margins remain strong across all merchandise categories. Halloween, fall and harvest merchandise was set in all stores by early August. Customers are reacting favorably to this merchandise, which bodes well for the second half of the year.”
Retail sales mostly solid in August; Limited leads apparel, but Gap declines
New York City — Despite low consumer confidence, the volatile economy and a hurricane, many retailers reported better-than-expected sales in August. Hurricane Irene appeared to put a dent in the results of some retailers on the East Coast, but the storm did not appear to do as serious damage as some expected.
Total retail sales rose 4.4%, just missing the 4.6% rise that Wall Street analysts had expected, according to Thomson Reuters. Of the 19 out of the 25 retailers that Thomson Reuters tracks, 11 beat expectations.
The biggest winners include Costco Wholesale Club, with an 11% rise in same-store sales, and BJ’s Wholesale Club, where sales rose 11.5%.
On the apparel front, Limited Brands’ same-store sales climbed 11% in August, beating analysts’ expectations for a 7.6% rise.
The company, whose stores include Bath & Body Work and Victoria’s Secret, said Thursday that revenue for the four weeks ended Aug. 27 increased 11% to $702.4 million from $630.3 million.
At Gap, same-store sales fell 6% on disappointing sales across its brands, led by a decline at its namesake stores. Analysts polled by Thomson Reuters expected a decline of 3.8%. Total revenue fell 3% to $1.1 billion.
Same-store sales at Gap North America plunged 8%, its six straight decline. Sales at Banana Republic and Old Navy both fell 4%.
"As we said on our recent earnings call with investors, we’re determined to make the necessary adjustments to women’s product and marketing to improve our overall performance and drive top-line growth going forward," said Glenn Murphy, chairman and CEO of Gap.
In other apparel same-store sales results for August:
- The Buckle’s sales rose 8.3%, nearly double the growth analysts had predicted.
- Wet Seal said that sales climbed 5.5%, beating analysts’ estimates. The results were driven by a 7.3% increase at the company’s 461 namesake stores. The smaller Arden B division, which has 84 stores, drove down the combined results with an 8.7%.
- At The Cato Corp., same-store sales decreased 3%.