| 02/03/2010 |
CHANGES AT COSCTO? |
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NEW YORK (Dow Jones)--In what analysts say appears to be succession planning, Costco Wholesale Corp. (COST) named a president and chief operating officer and established an Office of the President Monday evening.
After the bell on Monday, Costco named Craig Jelinek president and chief operating officer, effectively immediately. Jelinek, who will join the board of directors, was previously executive vice president in charge of merchandising, a position he held since 2004.
Co-founder Jim Sinegal, age 74, will continue as chief executive.
Jelinek's appointment is likely to soothe some investors' nagging questions surrounding the future leadership of the warehouse retailer.
"Mr. Jelinek's tenure and experience building Costco should allay fears that the cultural principles that have differentiated the Costco story will remain intact even after Mr. Sinegal's eventual retirement," J.P. Morgan analyst Charles Grom wrote in a note.
No mention of Sinegal's pending retirement was made by Costco in a statement released by the company.
Costco also said it created an Office of the President which includes Sinegal, together with Chairman Jeff Brotman, Senior Executive Vice President Dick DiCerchio and Jelinek.
The company said the four will coordinate on "major company matters."
Most analysts don't expect any major changes in the day-to-day operations of the company with the moves.
Still, it is unclear whether there has been a "succession race" set up between Jelinek and DiCerchio or whether Jelinek is the heir apparent to the CEO with the Office of the President intended as an interim step to provide support and executive experience, Bernstein analyst Colin McGranahan wrote in a note.
McGranahan added the company has a long-standing policy of promotion from within, and it is "nearly certain" that the successor to Sinegal will come from within Costco.
Separately, Reuters reported that Costco will spend about $940 million to expand in Taiwan, citing a Taiwan government official. The retailer's plans include a distribution center and unspecified number of new stores.
Costco wasn't immediately available for comment.
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