1954 – As a San Diego State University student, Jim Sinegal, currently Costco’s president and chief executive officer, began working part time for Sol Price at Fed-Mart. Sinegal continued to work for Price for 24 years at Fed-Mart and Price Club. 1978 – Sinegal, who ultimately became an executive vice president at Price Club, left to pursue other opportunities.1982 – Jeff Brotman, currently Costco’s chairman of the board of directors, and Sinegal met and drew up plans to start a new warehouse club business. Prior to Costco, Brotman, a University of Washington law school graduate, owned a woman’s apparel store, a men’s apparel store called Jeffrey Michael and was an early investor in Starbucks and Garden Botanika. 1983 – Costco was financed with $7.5million in venture capital. The concept was so popular that Costco turned away people who wanted to invest. 1985 – Costco went public and raised $29.8 million by offering 4.2 million shares at $10 per share. 1985 – French retailer Carrefour purchased 20% of Costco’s stock in a friendly move. In time, Carrefour executives would serve on Costco’s board of directors, and Sinegal and Brotman would serveon Carrefour’s board of directors. 1990 – Costco raised $95 million through a stock offering. The proceeds were used for expansion and to purchase existing leased sites. Costco planned to own 75% of its locations.
Costco – Kirkland Signature Borghese Cosmetics
1992 – Secret merger talks began between Price Club and Costco, but were abandoned in the spring. 1993 – Costco, in a partnershipwith Littlewoods Organization and Carrefour, set up a joint venture in the United Kingdom. Costco owned 60% of the venture, while the other two companies owned 20% each. Costco would hire local employees to manage its offices and club locations. 1993 – Merger talks between Costco and Price Club started again in April, but faltered shortly thereafter. However, from May to June, merger discussionsincreased. Costco felt threatened by the large capital base and history of growth through acquisition by Sam’s who could have potentially purchased Price Club or Costco making Sam’s the largest club operator. Robert Price, chairman and chief executive officer of Price Club, and Sinegal preferred that their organizations remain part of an “extended family,” rather than separately face Sam’s. In June,the merger was announced to the public. A new holding company, called PriceCostco, was formed. Price Club and Costco would become subsidiaries of the company. Costco shareholders would receive 52% of the new company and Price shareholders would receive 48% of the new company. 1994 – In July, management of the former Price Club and Costco organizations agreed to disagree, citing “philosophicaldifferences.” Many former Price Club executives joined a separate public company, called Price Enterprises. Price would become chief executive officer of Price Enterprises and Sinegal would become chief executive officer of PriceCostco. 1996 – Carrefour sold its 19.5 million-share stake in PriceCostco. Carrefour wanted to concentrate on development of its hypermarkets on a worldwide scale and to avoida potential conflict of interest with PriceCostco. 1997 – PriceCostco changed its name to Costco Companies, Inc. The company was traded on the NASDAQ under the symbol COST. All future locations would be called Costco Wholesale and all existing clubs would be converted to that name. 1997 – Costco opened an office in Chicago, Illinois to support its entry into the Midwest market. The officepurchased food and sundries products and re-ordered hardlines products. 1997 – The Federal Trade Commission (FTC) ruled that Toys ‘R’ Us unfairly restrained trade since it forced toy manufacturers to limit toy sales to warehouse clubs. Sinegal was the first witness called by the FTC at its hearing. He testified that the Toys ‘R’ Us’ practice put Costco at a competitive disadvantage.
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