Nordstrom 1999 Annual Report Download

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19 9 9 NORDSTROM ANNUAL REPORT
“ Show me what’s current!”
“ Give me choices!”
“ Shopping should be fun!”
“ I want service tailored to my needs.”
“ I want it all in one place.”
“ Where am I supposed to look?”
“ Wow! This looks different!” “ Inspire me!”
“ What’s up with the new styles?”

Table of contents

  • Page 1
    ...9 9 N OR D S TR OM AN N U AL R E P ORT " Give me choices!" " I want it all in one place." " Show me what's current!" " Wow! This looks different!" " Shopping should be fun!" " I want service tailored to my needs." " Inspire me!" " What's up with the new styles?" " Where am I supposed to look?"

  • Page 2
    ... time for malls?" " I want to look fashionable - but I'm not a size four!" " Do you have it in my size?" " I want the latest fashion." " You really want to know what my ideal shopping " I want perks for using my Nordstrom card." " It's about time!" " Don't make me go all over the store to find...

  • Page 3
    ... B SI DI ARI ES 1 " This is more like it!" xperience would be?" " Where am I supposed to look?" " It's gotta just click!" " I want to get in and get out." " Will I wear what's on every billboard? Not on It's gotta be my kind of music." your life!" Sometimes the best thing we can do is...

  • Page 4
    ...Who has the time... to get into the car, drive to the mall and search for clothes?" Imagine shopping from your home while sipping on a cup of tea. Sound appealing?To our catalog and online shoppers, it's more than appealing - it's a way of life. Who shops at NORDSTROM .com? Insomniacs. Moms who work...

  • Page 5
    ... .com Web site and N ordstrom Life/ Style and Clothes for Life by N ordstrom catalogs. And a rush of others are discovering NORDSTROM shoes.com, The World's Biggest Shoe Store! Who has the time to shop at Nordstrom? Now we all do. Mother of three Community volunteer Age: 3 9 Home: Marin County...

  • Page 6
    4 N ORDSTROM , I N C. AN D SU B SI DI ARI ES

  • Page 7
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 5 Dot coms are everywhere. The Nordstrom experience is one of a kind.

  • Page 8
    ... Agent Married for 3 7 years Age: 6 0 Home: Seattle, Washington Hobbies: grandchildren, dancing Should a passion for fashion fade over time? O f course not. We believe all customers are entitled to a shopping experience that leaves them feeling good, looking fashionable - and thinking of Nordstrom...

  • Page 9
    ... yet This more intimate, boutique-like setting will make our stores easier to navigate and shopping more enjoyable.We want each customer to immediately recognize the area designed for her, whether her tastes are modern, classic or mainstream. After all, fashion is not about age; it's about attitude.

  • Page 10
    8 N ORDSTROM , I N C. AN D SU B SI DI ARI ES

  • Page 11
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 9 Whether your style is classic, mainstream or modern, we'll make you feel right at home.

  • Page 12
    ... salespeople. Skillful tailors. An in-depth array of career and contemporary styles, including exclusive brands such as Façonnable, Halogen, and Callaway Golf Apparel by Nordstrom. And sizes that go beyond the norm: dress shirts in 57 sizes; clothing and sportswear in xxl and tall sizes; and...

  • Page 13
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 11 " I'm not shopping for a good time, I'm looking for the clothes I need." Investment Broker Sports fanatic Age: 4 3 Home: Redondo Beach, California Hobbies: golf, hoops, jazz

  • Page 14
    12 N ORDSTROM , I N C. AN D SU B SI DI ARI ES

  • Page 15
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 13 Let us handle the details, while you relax and savor the moment.

  • Page 16
    ... my friends... 'Guess what I paid for this?!'" " Shopping for bargains gives me such a rush!" " Once a week just isn't enough!" " Score!" Not everyone who has a love for bowling is on the PBA tour. And not everyone who loves Nordstrom merchandise shops at our full-line stores.They hit the...

  • Page 17
    ...And that's just the beginning. Mae West once said,"I generally avoid temptation unless I can't resist it." That might explain the appeal of the Nordstrom R ack. After all, it's not just discount. It's Nordstrom. Office Manager Social activities coordinator Age : 2 7 Home: Chicago, Illinois Hobbies...

  • Page 18
    16 N ORDSTROM , I N C. AN D SU B SI DI ARI ES

  • Page 19
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 17 If you love great deals and Nordstrom quality, the Nordstrom R ack's right up your alley.

  • Page 20
    18 N ORDSTROM , I N C. AN D SU B SI DI ARI ES " I have eclectic tastes." " So, will I wear what's on every billboard? Not on your life!" Interior Designer Aspiring playwright Age : 3 1 Home: White Plains, New York Hobbies: art collecting, samba dancing e

  • Page 21
    ... see into the soul of our store. Visual cues like painted columns, colored lights and then step aside...I can dress myself!" " Let me express myself- don't sell me the look on every corner." and draped fabric signal what's fresh. Modern music builds excitement. And new brands such as Halogen, and...

  • Page 22
    20 N ORDSTROM , I N C. AN D SU B SI DI ARI ES

  • Page 23
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 21 Futuristic windows, designed by artist Kenny Scharf, offer a glimpse into our new modern world.

  • Page 24
    ...'s hot now!" " I want service tailored to my needs." " I want to look fashionable - but I'm not a size four!" " What's up with the new styles?" " I want perks for using my Nordstrom card." " You really want to know " It's about time!" " Don't make me go all over the store to find " Show me...

  • Page 25
    ...opened up new channels of ...Nordstrom experience will always revolve around you. How do we know? hat my ideal shopping experience would be?" " This is more like it!" " Where am I supposed to look?" eans!" ecide if it's me." " It's gotta just click." " I want to get in and get out." " Will I wear...

  • Page 26
    24 N ORDSTROM , I N C. AN D SU B SI DI ARI ES is not so much where we stand " I find the great thing in this world as in what direction we are moving." - OLIVER WENDELL HOLMES

  • Page 27
    ...,Virginia; Providence, R hode Island; Mission Viejo, California; and Columbia, Maryland; plus three new R ack stores, and the relocation of our Spokane N ordstrom and Alderwood R ack stores into new, larger facilities.We are well positioned for future growth.There are a number of attractive markets...

  • Page 28
    ... • Strengthening our information resources and processes " Excellence is to do a common thing in an uncommon way." - BOOKER T. WASHINGTON Building a world-class brand. To a great extent, our brand is the "Nordstrom shopping experience" - defined primarily through our people and products.We want...

  • Page 29
    ...and accepting some level of risk can be rewarding. Better technology enables better service. Simply stated, we want to be better. We're proud of our 99-year heritage of striving to provide outstanding service to every customer. We're proud of our people, who are the lifeblood of our company and the...

  • Page 30
    ... 44 13 ⁄16 39 3 ⁄8 33 1 ⁄8 28 34 5 ⁄8 30 3 ⁄8 23 1 ⁄8 21 5 ⁄16 33 9 ⁄16 40 3 ⁄8 39 1 ⁄2 44 1 ⁄8 25 1 ⁄8 30 1 ⁄8 22 27 1 ⁄16 Nordstrom, Inc. common stock is traded on the New York Stock Exchange and quoted daily in leading financial publications. NYSE symbol - JWN

  • Page 31
    ... to Consolidated Financial Statements 4 9 Management and Independent Auditors' Reports 5 0 Ten-Year Statistical Summary 5 2 Officers of Nordstrom, Inc. 5 5 Directors and Committees 5 6 Retail Store Facilities 5 8 Shareholder Information Net Sales Dollars in Millions Diluted Earnings Per Share...

  • Page 32
    ... site NORDSTROM shoes.com, which offers online access to millions of pairs of shoes.The launch was supported by a multimedia national advertising campaign. Also during 1999, the Company opened four new fullline stores in Providence, R hode Island; Mission Viejo, California; Columbia, Maryland...

  • Page 33
    ... year) decreased in 1999 primarily due to missed fashion product offering opportunities in the women's, kids' and juniors' apparel divisions. The decrease in comparable store sales in 1998 was attributable to management's focus on controlling inventory levels, which resulted in lower, but more pro...

  • Page 34
    ... constructing new stores. The Company's capital expenditures aggregated approximately $700 million over the last three years, net of deferred lease credits, principally to add new stores and facilities and to improve existing stores and facilities. O ver 2.7 million square feet of retail store space...

  • Page 35
    ... to have a material impact on the Company's consolidated financial statements. Other 0 .4 % 57,000 Rack 8 .1 % 1,174,000 Central States 1 4 .4 % Southwest 3 2 .7 % 2,086,000 4,729,000 Northwest 19 .1 % 2,770,000 East Coast 25 .3 % 3,671,000 Square Footage by Market Segment at January 31...

  • Page 36
    ... except per share amounts Year ended January 3 1 , 2000 % of sales 1999 % of sales 1998 % of sales Net sales $ 5,124,223 Costs and expenses: Cost of sales and related 3,359,760 buying and occupancy Selling, general, and administrative 1,491,040 Interest, net 50,396 Service charge income...

  • Page 37
    ...: Notes payable Accounts payable Accrued salaries, wages and related benefits Income taxes and other accruals Current portion of long-term debt Total current liabilities Long-term debt Deferred lease credits Other liabilities Shareholders' equity: Common stock, no par: 250,000,000 shares authorized...

  • Page 38
    ... Statements of Shareholders' Equity Dollars in thousands except per share amounts Common Stock Shares Amount Unearned Compensation Retained Earnings Accum. Other Comprehensive Income Total Balance at February 1, 1997, as previously reported Adjustment for sales returns reserve, net of taxes...

  • Page 39
    ... cash provided by operating activities: Depreciation and amortization Amortization of deferred lease credits and other, net Stock-based compensation expense Change in: Accounts receivable, net Merchandise inventories Prepaid income taxes and other Accounts payable Accrued salaries, wages and related...

  • Page 40
    ... except per share amounts Note 1 : Summary of Significant Accounting Policies The Company: Nordstrom, Inc. is a fashion specialty retailer offering a wide selection of high-quality apparel, shoes and accessories for women, men and children, principally through 71 large specialty stores and 28...

  • Page 41
    ... assets. Customer Accounts Receivable: Net Sales: R evenues are recorded net of estimated returns and exclude sales tax. Cash Management: The Company's cash management system provides for the reimbursement of all major bank disbursement accounts on a daily basis. Accounts payable at January 31...

  • Page 42
    ...: The carrying amount of cash equivalents and notes payable approximates fair value because of the short maturity of these instruments. The fair value of the Company's investment in marketable equity securities is based upon the quoted market price and is approximately $60,778 at January 31...

  • Page 43
    ... is reported as short-term because the Company intends to sell it within one year. Accumulated other comprehensive income includes the increase in the fair market value of the investment based on its quoted market value at January 31, 2000, net of applicable taxes of $10.9 million. Note 7 : Accounts...

  • Page 44
    ..., the net book value of property located in California is approximately $335,000. The Company does not carry earthquake insurance in California because of its high cost. At January 31, 2000, the Company has contractual commitments of approximately $80 million for the construction of new stores or...

  • Page 45
    ... No. 123 in accounting for its stock options, compensation expense would be recognized based on the fair value of the options at the date of grant. To estimate compensation expense which would be recognized under SFAS 123, the Company used the modified Black-Scholes option-pricing model with the...

  • Page 46
    ... number of shares ...information about stock options outstanding for the Plan as of January 31, 2000: Options Outstanding WeightedAverage Remaining Contractual Life (Years) WeightedAverage Exercise Price Options Exercisable WeightedAverage Exercise Price Range of Exercise Prices Shares Shares...

  • Page 47
    ... etail Stores, Credit O perations, and Catalog/ Internet segments. The R etail Stores segment derives its sales from high-quality apparel, shoes and accessories for women, men and children, sold through retail store locations. It includes the Company's Product Development Group which coordinates the...

  • Page 48
    ... 8 Retail Stores Credit Operations Catalog/ Internet Corporate and Other Eliminations Total Net sales and revenues to external customers Service charge income Intersegment revenues Interest, net Depreciation and amortization Income tax expense (benefit) Net earnings (loss) Assets (a) Capital...

  • Page 49
    ...'s and children's non-athletic footwear and accessories, which has subsequently been acquired by Jones Apparel, other defendants include various department store and specialty retailers. The lawsuits have now been consolidated in federal district court in New York and purport to be Nine West. The

  • Page 50
    ...unaudited) Year ended January 3 1 , 2 0 0 0 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Total Net sales Gross profit Earnings before income taxes Net earnings Basic earnings per share Diluted earnings per share Dividends per share $ 1,039,105 350,909 51,688 31,538 .22 .22 .08 $ 1,443,395...

  • Page 51
    ... consolidated financial statements and related notes have been audited by Deloitte & Touche LLP, independent certified public accountants.The accompanying auditors' report expresses an independent professional opinion on the fairness of presentation of management's financial statements. The Audit...

  • Page 52
    ... Customer accounts receivable, net Merchandise inventories Current assets Current liabilities Working capital Working capital ratio Land, buildings and equipment, net Long-term debt, including current portion Debt/capital ratio Shareholders' equity Shares outstanding Book value per share Total...

  • Page 53
    N ORDSTROM , I N C. AN D SU B SI DI ARI ES 51 19 9 7 19 96 19 95 19 9 4 19 93 19 92 19 91 $693,123 719,919 1,549,819 795,321 754,498 1.95 1,152,454 380,632 .2720 1,457,084 159,269,954 9.15 2,726,495 $874,103 626,303 1,612,776 833,443 779,333 1.94 1,103,298 439,943 .3232 1,408,053 162,226,...

  • Page 54
    ...Manager, Central States Dale C. Crichton, 51 Executive Vice President, Cosmetics, Full-Line Stores Jack H. Minuk, 45 Vice President, Women's Shoes, Full-Line Stores Joseph V. Demarte, 48 Vice President, Human Resources Blake W. Nordstrom, 39 Executive Vice President and President, Nordstrom Rack...

  • Page 55
    ... President, Accessories, Gifts, Women's Specialized, East Coast Region Delena M. Sunday, 39 Vice President, Diversity Affairs Susan A. Wilson Tabor, 54 Executive Vice President, General Manager, Nordstrom Rack Group Nora M. Cummings, 45 Vice President, San Diego/Arizona Regional Manager Sherry...

  • Page 56
    ... Janis M. Walsh, 47 Vice President, Information Technology Services Michael A. Tam, 42 Vice President, Director of Brands Brooke F. White, 37 Vice President, Public Relations Nordstrom Rack Group Timothy J. Bean, 43 Vice President, Merchandise Manager, Shoes Kelly Cole Berka, 44 Vice President...

  • Page 57
    ... Executive D. Wayne Gittinger, 67 Director; Partner, Lane Powell Spears Lubersky LLP Seattle, Washington Enrique Hernandez, Jr., 44 Director; President and CEO, Inter-Con Security Systems, Inc. Pasadena, California John A. McMillan Bruce A. Nordstrom John N. Nordstrom John J. Whitacre Audit Ann...

  • Page 58
    ...Park Cerritos Corte Madera Costa Mesa Escondido Glendale Los Angeles Mission Viejo Montclair Palo Alto Pleasanton Redondo Beach Riverside Sacramento San Diego San Diego San Diego San Francisco San Francisco San Mateo Santa Ana Santa Barbara Santa Clara Walnut Creek New York Garden City White Plains...

  • Page 59
    ... CA San Jose, CA San Leandro, CA Littleton, CO Fashion Place Mall Crossroads Plaza 1981 1980 110,000 140,000 Northbrook, IL Schaumburg, IL Gaithersburg, MD Bellevue Square Alderwood Mall Downtown Seattle (1) Northgate Mall River Park Square Tacoma Mall Southcenter Mall Vancouver Mall Downtown Yakima...

  • Page 60
    ... be provided to shareholders upon written request to: Nordstrom, Inc. Investor Relations P.O. Box 2737 Seattle, Washington 98111 or by calling (206) 233-6301. Shareholder Information Please visit our www.nordstrom.com Web site to obtain the latest available information. In addition, the Company is...

  • Page 61
    ... the nation's leading fashion specialty retailers, with 104 stores located in 23 states, including 71 full-line stores, 27 Nordstrom Racks, three Façonnable boutiques, two free-standing shoe stores, and one clearance store. The Company also serves customers through its online presence at http://www...

  • Page 62