Nordstrom 2001 Annual Report Download

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20200324 NORDSTROM
2001 Annual Report • VERSION
8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar
2001 ANNUAL REPORT
[why this store. why now.]
Varn

Table of contents

  • Page 1
    2001 ANNUAL REPORT [why this store. why now.] 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar Full Color + 550pms + metalic 8002 + Var OFC Varn pms 550 pms 8002 Cyan Mag Yelo Blk

  • Page 2
    ... Financial Statements Independent Auditors' and Management Report Eleven-Y ear Statistical Summary 40 Of ficers of the Corporation and Executive Team 41 42 44 Board of Directors and Committees Retail Store Facilities Shareholder Information 1 NORDSTROM I NC. AND SUBSIDIARIES View this...

  • Page 3
    ... we do business on a daily basis. So who better to answer questions about the state of our company than the folks ultimately responsible for making it all happen. 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar Full Color + metalic 8002...

  • Page 4
    ... all is said and done, we want every customer to walk away feeling really good about what they bought." GENIE YAO BP. SHOES BUYER Northern California 13 Y EARS OF S ERVICE 2 NORDSTROM INC. AND SUBSIDIARIES 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi...

  • Page 5
    ... truly appreciates its customers - and allows its sales associates the freedom to do whatever it takes to ensure their satisfaction." SUE BAKER ENCORE SALESPERSON Indianapolis, Indiana 6 Y EARS OF S ERVICE NORDSTROM INC. AND SUBSIDIARIES 2 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375...

  • Page 6
    ... us to be a better, smarter, more efficient retailer. And better serve our customers." TONJA KUNTZ VICE PRESIDENT CORPORATE MERCHANDISE MANAGER Women's Active Sportswear/Hosiery/Lingerie 14 Y EARS OF S ERVICE 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi...

  • Page 7
    ... feeling, because you're also working toward the company's goals. In the end, everyone wins." JAIME FERNANDEZ MEN'S FURNISHINGS DEPARTMENT MANAGER Tampa, Florida 4 Y EARS OF S ERVICE NORDSTROM INC. AND SUBSIDIARIES 5 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX...

  • Page 8
    ...managers, merchandisers, front-line salespeople in a manner that is essentially transparent to them, they will be free of distractions in their interactions with the customers in our stores." MIKE SATO VICE PRESIDENT Full-Line Stores Operations 17 Y EARS OF S ERVICE 20200324 NORDSTROM 2001 Annual...

  • Page 9
    ...the buyers have done a good job of taking all the feedback-and they get a lot-and adjusting the merchandise mix to reflect what our customers really want." MICHELLE HAGGARD STORE MANAGER Riverside, California 10 Y EARS OF S ERVICE NORDSTROM INC. AND SUBSIDIARIES 7 20200324 NORDSTROM 2001 Annual...

  • Page 10
    ... implementation of our Perpetual Inventory system, a vital merchandising tool that will provide us with information to make smarter decisions throughout the selling process, and better serve our customers. • We've streamlined back-of-the-house operations, saving valuable time and effort, while...

  • Page 11
    ... economy. The most signif icant sales declines were in men's apparel and shoes while women's apparel was essent iall y f lat. Net sales increased 7.4 % in 2 0 0 0 due to new store openings. During 2 0 0 0 , the Company opened six Nordstrom full -line stores and ten Nordstrom Rack stores. Comparable...

  • Page 12
    ..., general and administrative expenses as a percent of sales was due to increased costs in the areas of direct selling, credit and sales promotion, related in part to store openings, and increased costs for information services resulting from 1999 the Company's investment in new technology. Fiscal...

  • Page 13
    ... due to higher credit sales and increases in the number of credit accounts. Credit sales and the number of credit accounts increased as a result of a targeted marketing ef fort toward inactive accounts and the introduction of a rewards program. In 2002, service charge income is planned to be higher...

  • Page 14
    ...three years, including new stores, the remodeling of existing stores, new systems and technology, and other items. additional borrowings, resulting in an increase in the Company's debt to capital ratio. Dividend Policy In 2001, the Company paid $.36 per share of common stock in cash dividends, the...

  • Page 15
    ... ailer of high quali ty men's and women's apparel and accessories. The Company paid $ 8 8 million in cash and issued 5 ,0 74 ,0 0 0 shares of common stock of the Company for a tot al considerat ion of $ 16 9 million. The purchase also provides for a cont ingent payment to one of the previous owners...

  • Page 16
    ...- 5 Years Over 5 Years Put Agreement The holders of the minori ty interest of Nordstrom.com LLC, through their ownership interest s in i t s managing member, Nordstrom.com, Inc., have the right to sell their shares of Nordstrom.com, Inc. to the Company for ef fect ivel y $ 8 0 million in the event...

  • Page 17
    ... ivi t ies. As a result, while the Company believes there is a reasonable basis for the for ward-looking st atement s, one should not place undue reliance on those st atement s. NORDSTROM I NC. AND SUBSIDIARIES 15 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175...

  • Page 18
    ...share amounts % of Year ended January 31, Net sales Cost of sales and related buying and occupancy Gross profit Selling, general and administrative Operating income Interest expense, net Write-down of investment Service... 16 NORDSTROM INC. AND SUBSIDIARIES 20200324 NORDSTROM 2001 Annual Report • ...

  • Page 19
    ...: 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 20
    ...dividends paid ($ .3 6 per share) Issuance of common stock for: Stock opt ion plans Employee stock purchase plan Stock compensat ion Purchase and ret irement of common stock Balance...these st atement s. 18 NORDSTROM I NC. AND SUBSIDIARIES 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10...

  • Page 21
    ... inventories Prepaid expenses Other assets Accounts payable Accrued salaries, wages and related benefits Income tax liabilities and other accruals Other liabilities Net cash provided by operating activities Investing Activities Capital expenditures Additions to deferred lease credits Payment...

  • Page 22
    ... for retail stores. Catalog and e-commerce sales include shipping revenue and are recorded upon shipment to the customer. Buying and Occupancy Costs: Buying costs consist primarily of salaries and expenses incurred by the Company's merchandise managers, buyers and private label product development...

  • Page 23
    ... is not material to the Company's financial condition or results of operations. The Company has no material of f-balance sheet credit risk, and the fair value of derivative financial instruments at January 31, 2002 and 2001 is not material. Recent Accounting Pronouncements: In February 2001, the...

  • Page 24
    ... contingent payment is performance based, the actual amount paid will likely vary from this amount and will be expensed when it becomes probable that the targets will be met. Note 3: Employee Benefits The Company provides a profit sharing plan and 401(k) plan for employees. The profit sharing plan...

  • Page 25
    ... and depreciation dif ferences Employee benefits Other Total deferred tax liabilities Net deferred tax assets 2002 $33,896 2001 $33,458 weighted average number of common shares outstanding during the year plus dilutive common stock equivalents (primarily stock options, performance share units...

  • Page 26
    ... are collateralized by Nordstrom VISA credit card receivables that are sold to the trust on an ongoing basis. The carrying amounts of the retained interests approximate fair value and are included in customer accounts receivable. Gains or losses are recognized on the sale of VISA receivables to the...

  • Page 27
    ... The following table illustrates the change in fair market value estimates given independent changes in assumptions. +10% Gross Yield: IO Strip Class B Seller Retained Interest Interest Expense on Issued Classes: IO Strip Class B Seller Retained Interest Card Holders Payment Rate: IO Strip...

  • Page 28
    ... the purchase of foreign merchandise, the Company has outstanding letters of credit totaling $77,085 at January 31, 2002. Capitalized software includes external direct costs, capitalized internal direct labor and other employee benefits, and capitalized interest associated with the development of...

  • Page 29
    ...0 0 million of Class A notes backed by Nordstrom Private Label Receivables (" PL Term" ). The PL Term bears a f ixed interest rate of 4 .8 2 % and has a maturi ty of f ive years. The Company will use the proceeds for general corporate purposes and capi t al expansion. Required principal payment s on...

  • Page 30
    ... minimum lease payments Note 14: Stock-Based Compensation Stock Option Plan The Company has a stock option plan ("the Plan") under which stock options, performance share units and restricted stock may be granted to key employees. Stock options are issued at the fair market value of the stock at the...

  • Page 31
    ...,752) 8,135,301 3,145,393 The following table summarizes information about stock options outstanding for the Nordstrom, Inc. Plan as of January 31, 2002: Options Outstanding WeightedAverage Remaining Contractual L ife (Years) 8 6 7 7 WeightedAverage Exercise Price $19 27 36 $24 Options Exercisable...

  • Page 32
    .... Employee Stock Purchase Plan The Black-Scholes method was used to estimate the fair value of the options at grant date based on the following factors: Year ended January 31, Stock Options: Risk-free interest rate Volatility Dividend yield Expected life in years Weighted-average fair value at...

  • Page 33
    ... ail Stores segment derives i t s revenues from sales of high-quali ty apparel, shoes and accessories. It includes the Company's product development Balance sheet amount s: Addi t ional minimum liabili ty Int angible asset $ (8 ,5 6 7 ) 6 ,7 2 0 group, which coordinates the design and product ion...

  • Page 34
    ... external customers (b) Service charge income Intersegment revenues Interest expense, net Depreciation and amortization Amortization of intangible assets Income tax expense (benefit) Net earnings (loss) Assets (a)(b) Intangible assets Capital expenditures Retail Stores Credit Operations Catalog...

  • Page 35
    ... fair value. During the same year, the Company accrued and paid $13,000 for certain severance and other costs related to a change in management. Note 19: Vulnerability Due to Certain Concentrations Approximately 31% of the Company's retail square footage is located in the state of California...

  • Page 36
    ... of operations or cash f lows. Cosmetics. The Company was originally named as a defendant along with other department store and specialty retailers in nine separate but virtually identical class action lawsuits filed in various Superior Courts of the State of California in May, June and July 1998...

  • Page 37
    ... not-for-profit corporation bringing claims on behalf of the City of Spokane and the Spokane Parking Public Development Authority. The claims relate to the River Park Square Mall and Garage Project in Spokane, Washington (the "Project"), which includes a Nordstrom store. The portion of the complaint...

  • Page 38
    ... per share Diluted earnings per share Dividends per share Common stock price High Low Year ended January 31, 2001 Net sales Gross profit Write-down of investment Earnings before income taxes Net earnings Basic earnings per share Diluted earnings per share Dividends per share Common stock price...

  • Page 39
    ... information that appears in the annual report. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include estimates based on management's best judgment. The Company maintains a comprehensive system of internal...

  • Page 40
    ... sales Gross profit Selling, general and administrative Operating income Interest expense, net Write-down of investment Service charge income and other, net Earnings before income taxes Income taxes Net earnings Basic earnings per share Diluted earnings per share Dividends per share Comparable store...

  • Page 41
    ...,000 83 11,754,000 78 10,713,000 76 9,998,000 74 9,282,000 72 9,224,000 68 8,590,000 NORDSTROM INC. AND SUBSIDIARIES 39 20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar Full Color + metalic 8002 PAGE 39 pms 8002 Cyan Mag Yelo...

  • Page 42
    ..., Nordstrom Rack NW Regional Manager Robert E. Campbell, 46 Vice President, Strategy and Planning, Treasurer Jack H. Minuk, 47 Vice President, Corporate Merchandise Manager, Women's Shoes Full-line Stores Joel T. Stinson, 52 Executive Vice President and Chief Administrative Of ficer MEMBER OF...

  • Page 43
    ... at UCLA Los Angeles, California Alison A. Winter, 55 Executive Vice President for Midwest Personal Financial Services, The Northern Trust Corporation Chicago, Illinois Committees Executive John A. McMillan Bruce A. Nordstrom John N. Nordstrom Compensation and Stock Options Enrique Hernandez, Jr...

  • Page 44
    ... Garden City White Plains Pennsylvania King of Prussia Rhode Island Providence Virgina Arlington McLean Norfolk Central States Illinois Chicago Oak Brook Schaumburg Skokie Indiana Indianapolis Kansas Overland Park Store Name Store Square Footage Chandler Fashion Center Scottsdale Fashion Square...

  • Page 45
    ... Jose, CA San Leandro, CA Woodland Hills, CA Clackamas Town Center Downtown Portland L loyd Center Salem Center Washington Square 121,0 0 0 174 ,0 0 0 15 0 ,0 0 0 71,0 0 0 18 9,0 0 0 L i ttleton, CO Broomf ield, CO Buford, GA Honolulu, HI Northbrook, IL Oak Brook, IL Fashion Place Crossroads Plaza...

  • Page 46
    ... Nordstrom Downtown Seattle Store John W. Nordstrom Room, fifth f loor 1617 Sixth Avenue Seattle, Washington 98101-1742 Form 10-K The Company's annual report on Form 10-K for the year ended January 31, 2002 will be provided to shareholders upon written request to: Nordstrom, Inc. Investor Relations...

  • Page 47
    20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar metalic 8002 + Var. PAGE IBC Varn pms 550 Cyan Mag Yelo Blk

  • Page 48
    20200324 NORDSTROM 2001 Annual Report • VERSION 8.375 x 10.875 • SCITEX • 175 lpi • Kodak 80# Cougar Full Color + 550pms + Var OBC Varn pms 550 Cyan Mag Yelo Blk