Jelinek: Well, we’ve got us a pretty good business going in Asia where we’re at right now. There’s lots of opportunities in the countries, in Japan, in Korea, in Taiwan. We’re looking at France and Spain. We’ll get that going.
You have to be careful. We’ve always been very conservative not to stretch the management so far where we can’t run the business the way we choose to run it. I don’t see us …
China will always be there. China will be there 15 years from now, 10 years from now. At some point, we’ll probably look at the opportunities in China. We’ve been over there, we’ve looked at it, but right now we think we’ve got enough in Asia going on right now with Taiwan, Korea, and Japan, and within the U.S. where we can do just fine if we’re not in China.
Austin: There are a lot of retailers that have gone to China, certainly, with international experience and they’ve done very poorly over there. I know Best Buy has done very poorly, Wal-Mart’s had a tough time. Why do you think it is that big, ordinarily successful retailers have a really tough time with China?
Jelinek: You know, I think that’s a pretty good question. That’s one reason that…
It’s not fair for me to say, because I haven’t spent a lot of time over there. I think when I go in there they all kind of look the same, so maybe you can’t tell what’s different about them, just because they’re from the U.S.
But that’s one of the reasons that… we’re very successful in Korea, Japan, Taiwan, so we might as well go there. If we knew somebody that was really successful over in China, but we haven’t seen that at the moment. More people seem to be cutting back than going in there, which, to me, that’s kind of a red flag.
Austin: You talked about, in the U.S. if you go somewhere — let’s say Omaha — the store is not going to make as much as one on the West Coast because you have to establish yourself there. There’s always a cost.
China will always be there, but there’s a cost to maybe being later and trying to build your presence there. How do you think about that trade-off, between executing and being able to take advantage of opportunities and be among the first to establish in a market before other companies go and open up warehouse concepts and build up their customer base?
Jelinek: The key is that there’s got to be other companies that go in there and build there. Not many people have gone in and been successful in the warehouse business. At one time, there was probably eight different clubs. Now you’re basically down to three. You’ve got BJ’s, you’ve got Sam’s, and you’ve got Costco.
I don’t know that you’re going to see anybody else jump in the business at the moment. When we feel that the time is ready, then we would go over there and compete, but right at the moment we don’t see that being something that we have to do.
Austin: When you went to Japan and Korea before Europe, was that because you had seen more success within the warehouse space, or demographics? What made you go over there before…?
