Dillard's 2009 Annual Report Download - page 5

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PART I
ITEM 1. BUSINESS.
General
Dillard’s, Inc. (the ‘‘Company’’, ‘‘we’’, ‘‘us’’, ‘‘our’’ or ‘‘Registrant’’) ranks among the nation’s
largest apparel and home furnishing retailers. Our Company, originally founded in 1938 by William T.
Dillard, was incorporated in Delaware in 1964. As of January 30, 2010, we operated 309 Dillard’s
stores, including 12 clearance centers, and one Internet store offering a wide selection of merchandise
including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and
other consumer goods. On August 29, 2008, the Company purchased the remaining interest in CDI
Contractors, LLC and CDI Contractors, Inc. (‘‘CDI’’), a former 50% equity method joint venture
investment of the Company, for a cash purchase price of $9.8 million. CDI is a general contractor
whose business includes constructing and remodeling stores for the Company. Based in Little Rock,
Arkansas, CDI represented approximately 2% of the total assets of the consolidated Company at
January 30, 2010.
The following table summarizes the percentage of net sales by segment and major product line:
Percentage of Net Sales
Fiscal Fiscal Fiscal
2009 2008 2007
Retail operations segment:
Cosmetics ..................................... 15% 15% 15%
Ladies’ apparel and accessories ...................... 36 37 37
Juniors’ and children’s apparel ...................... 8 9 9
Men’s apparel and accessories ....................... 17 18 18
Shoes ........................................ 14 13 13
Home and furniture .............................. 7 7 8
97 99 100
Construction segment .............................. 3 1 —
Total ........................................... 100% 100% 100%
Most of our stores are located in suburban shopping malls and open-air centers. Our customers
may also purchase merchandise on-line at our website, www.dillards.com, which features on-line gift
registries and a variety of other services. We operate retail department stores located primarily in the
southwest, southeast and midwest regions of the United States. The stores are located in 29 states.
We conduct our retail merchandise business under highly competitive conditions. Although we are
a large regional department store, we have numerous competitors at the national and local level that
compete with our individual stores, including specialty, off-price, discount, and Internet retailers.
Competition is characterized by many factors including location, reputation, assortment, advertising,
price, quality, service and credit availability. We believe that our stores are in a strong competitive
position with regard to each of these factors. Other retailers may compete for customers on some or all
of these factors, or on other factors, and may be perceived by some potential customers as being better
aligned with their particular preferences.
Our merchandise selections include, but are not limited to, Dillard’s lines of exclusive brand
merchandise such as Antonio Melani, Gianni Bini, Roundtree & Yorke and Daniel Cremieux. Dillard’s
exclusive brand/private label merchandise program provides benefits for Dillard’s and our customers.
Our customers receive fashionable, higher quality product often at a savings compared to national
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