Nordstrom 1999 Annual Report Download - page 27

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25NORDSTROM, INC. AND SUBSIDIARIES
Dear Shareholders,
The 1999 fiscal year was one of transition for Nordstrom,
designed to position us to compete successfully in the
future.Transition was, and is, necessary. Competition
has never been more intense, whether from specialty
retailers or big-box department stores. Our industry is
consolidating, making existing competitors even more
formidable.Additionally, the playing field is expanding
to include new ways of reaching customers.This letter
and the accompanying annual report will highlight the
progress made during the year and outline our plans for
the future.
New stores propel sales growth.
Our sales growth was fueled by the opening of full-line
stores in Norfolk,Virginia; Providence, R hode Island;
Mission Viejo, California; and Columbia, Maryland;
plus three new R ack stores, and the relocation of our
Spokane Nordstrom and Alderwood R ack stores into
new, larger facilities.We are well positioned for future
growth.There are a number of attractive markets with-
in the United States that we have not yet penetrated, or
in which we are not fully represented.
We added 6.6 percent to our stores’gross square foot-
age in 1999, and expect upper single-digit percentage
growth annually over the next several years. O ur com-
parable store sales in 1999 declined 1.1 percent. In
recent years we had allowed inventory levels to expand
at a rate in excess of our growth in sales, and have taken
steps to better align these two measures.While some of
the shortfall in sales was offset by improvements
achieved in gross margin, we fully recognize the need
to generate sales growth from existing stores — as well
as from new stores. However, we want to ensure that it
is quality sales growth, and later in this letter I’ll
describe several initiatives directed to accomplish this.
Streamlined structure strengthens buying process.
In 1999 we realigned the buying structure to promote
clarity and accountability, to gain increased leverage in
market, and to facilitate stronger partnerships with ven-
dors through fewer and more focused points of con-
tact.We want our most experienced merchants to have
the greatest influence over our merchandise buying
decisions. Our aim is to quickly take advantage of
emerging national trends, while maintaining awareness
of local competitive factors and customer preference.
New subsidiary expands Internet presence.
In fall of 1999 we formed a subsidiary company called
N O RD ST RO M .com, which consists of our catalog and
e-commerce businesses. Since the Web site was
launched in October of 1998, it has evolved significant-
ly in terms of its look, ease of navigation, and the
JOHN WHITACRE, Chairman & CEO