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Jim Sinegal

Jim Sinegal, co-founder (with Seattle retailer Jeff Brotman) and chief executive officer of Costco, the warehouse retail company based in Issaquah, Washington, was born to a Catholic family in 1936 in Pittsburgh, Pennsylvania. After studying at San Diego Junior College and San Diego State University he entered the world of sales, which would never be the same. At eighteen years old he was a bagger for FedMart, the discount department stores started by Sol Price in San Diego (originally in an airport hangar). Within a few years he was married (to Janet, with whom he has three children) and later became executive vice president of merchandising and operations for that company; he then worked as executive vice president for Builders Emporium, for the Price Company, and for Sinegal/Cham ber lain before he and Brotman founded Costco in 1983.

The original strategy for Costco, as Sinegal has told many a reporter over the years, was to offer lower prices and better value to members by stripping away every orthodox aspect of sales that Sinegal and Brotman considered unnecessary, like fancy store fixtures, troops of salespeople, delivery systems, well-appointed executive offices, advertising, even backup inventory. In a sense the revolutionary aspect of Costco was to make retail the simplest and least complicated transaction imaginable, and to insist that lowest price was indeed lowest price; Sinegal, for example, mandated a 14% ceiling on store markup of national brands, a policy that never wavered, even when Costco could easily have sold inventory for far more.

Jim also became internationally renowned for simply being an honest and hardworking man; he walks the floors of his stores (sometimes 12 stores a day), he pays high wages to his employees so they can support their families, he cares more for Costco members than he does for shareholders (he famously dismisses Wall Street analysts who wish he would do the reverse), he answers his own phone (tersely: “Sinegal!”), and he says the philosophy of the company is essentially to be on a first-name basis with everyone. His own name tag reads simply JIM, he reads thousands of customer comments a week, and more than once he has been mistaken for a stock clerk, perhaps because he does stock shelves when the mood is upon him.

The results of such values and blunt honesty? Costco is the nation’s fourth-largest retailer, with sales of more than $70 billion from some 500 stores in 40 states and 9 countries —but it has the lowest employee turnover rate in all of American retailing, partly because Jim insists on a thorough health plan for employees, and it had zero layoffs through the recession. “We have some 150,000 members, which means we have 150,000 ambassadors out there saying good things about Costco,” says Sinegal, blunt and amused, as usual. “What do I care about Wall Street? We’re in the business of building an organization that we hope will be here fifty years from now. Paying good wages to keep good people working for you is good business. We owe that to communities where we do business.”

Sinegal is amused by his legendary status in the business world, and defuses it with a salty honesty and a cheerful attention to detail—he loves to note that Costco sells some 50 million rotisserie chickens a year, for example. But he is adamant that a moral compass and an attentiveness to humane and ethical behavior are paramount in his company and conduct; which is one reason Univer sity president Father Bill Beauchamp, C.S.C., has asked Jim to deliver the Commencement Address to the University’s Class of 2010.