Pricesmart Case Study

1053 Words5 Pages
Introduction PriceSmart Incorporated an American company is the largest operator of membership warehouse clubs in Central America and the Caribbean selling food and consumer goods. The multinational operation serves over one million cardholders in thirty nine owned and operated warehouses spread across twelve countries and one US territory. PriceSmart warehouse clubs can be found in Colombia (7), Costa Rica (6), El Salvador (2), Guatemala (3) Honduras (3), Nicaragua (2), Panama (5), Aruba (1), Barbados (1), Dominican Republic (3), Jamaica (1), Trinidad and Tobago (4), and U.S. Virgin Islands (1). The company also offers online shopping to members in all countries. History Price Club was founded in 1976 by Sol Price, his son Robert and business…show more content…
Price Club was opened on the outskirts of San Diego. Because the businesses the company catered to did not have the financial capabilities of larger organizations, they had to tailor the goods to meet their customer needs. They started with office supplies and moved onto other items like tires, food paper products and a range of other items. The company opened its doors to members who could show proof of business activity. Price Clubs first year of business proved troublesome for the owners, bringing in $16 million dollars in sales but with a loss of $750,000. The loss baffled the Prices until they decided to extend membership to Government employees like, hospitals and financial institutions. This new policy turned the company into a massive success story. In 1980, Price Club went public and eager investors allow wanted to share in the rapid growth of the chain. Price Club entered the public domain with a nearly $150 million dollars in sales and earning $6 million dollars in profits before taxes. By the end of the nineties, Price Club operated more than fifty clubs and its revenue was close to $5 billion. The company had established its name as the industry leader and enjoyed success until competition from other…show more content…
His son Robert Price and Jim Sinegal shared power and leadership in the new company. This new arrangement failed giving leadership back to the Costco team and eight months later Robert Price left with control of Price Costco’s commercial real estate operations and controlling interests in merchandising opportunities in international markets such as Australia, New Zealand and Central America. With these assets he opened another company named Newco which paved the way for Price Enterprises where Robert Price was named Chairman, President and CEO of the organization. Price Enterprises had licensing agreements with Micronesia and Guam and in 1996 opened its first club in Panama. In 1997 a second club was opened in Panama, additional licenses were granted to China and Indonesia and Price Enterprises separated itself from PriceSmart and hired Gilbert A Partida as CEO, PriceSmart began trading on the NASDAQ Stock Exchange as

More about Pricesmart Case Study

Open Document