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The New York Times reports on the move by Costco into what many people might perceive as an unusual line of retailing - "selling fine art, including limited-edition lithographs by Pablo Picasso, Marc Chagall and Joan Miró."

The artwork, which is matted, framed and museum-quality, has been sold in special appearances at selected stores. But now, the effort has been successful enough that the company is devoting part of its website to fine art, selling artwork for prices that range from $450 to $15,000.

"When I first heard about it, I wasn't sure it would work," Liz Elsner, an assistant vice president at, told the NYT. "Buying art is such a personal thing. But every time we've thrown them up there, they're gone within a week. We just loaded six more on the Web site, and we're down to two already."

Elsner told the NYT that Costco is using the same margin formula for fine art that it uses on diapers, televisions, and frozen foods, marking the pieces up by no more than 14 percent. However, the company is trying not to use the word "discount" when discussing the fine art; rather, it just wants customers to know that they can buy these pieces at a 'wonderful price."
KC's View:
This is part of Costco's overall strategy to maintain a "wow" factor its marketing and selection. Last fall, company CEO Jim Sinegal told Portland State University's Food Industry Leadership Center annual executive Forum how Costco has become the nation's largest wine retailer, is generating a lot of excitement with gasoline sales in selected markets, and even recently sold a $215,000 diamond.

In this context, a $15,000 Picasso doesn’t sound like such a stretch.