Nordstrom 2007 Annual Report Download - page 4

We’ve learned that we have tremendous opportunities to gain share of wallet from our core customers. We know these customers
as a group are growing at two times the rate of the overall U.S. market, which presents substantial opportunity to grow with these
customers as well as increase our share of their spend.
We continue to grow our presence in the top markets and best retail locations around the country. We are most interested in
pursuing the very best opportunities available rather than increasing square footage just for growth’s sake, and we are happy
with the commitments we have made. This spring we opened three new full-line stores and will open five more during the year.
We are particularly excited to share with you the opening of our first full-line store in Hawaii, which opened March 7 at Ala Moana
Center in Honolulu. This 210,000-square-foot store is the culmination of 12 years of trying to secure a space in one of the best
malls in the country. We also opened our eighth store in Florida at Aventura Mall and our second Boston-area store in Burlington,
Massachusetts. Additional full-line openings for 2008 include: Clinton Township, Michigan, April 18; Thousand Oaks, California,
September 5; Indianapolis, Indiana, September 19; Pittsburgh, Pennsylvania, October 24; and Naples, Florida, November 7.
Additionally, we are looking forward to relocating our Tacoma Mall store — which originally opened in 1966 — to a brand new
building in the mall on October 3. By the end of 2008, we will have 109 full-line stores. Our longer-term plan is to have 140 to 150
stores by 2015. We believe new stores are a good investment for our shareholders and are the most productive use of our capital.
Equally critical to our long-term growth is the continued strong performance of our existing stores. Therefore, a top priority for
our company remains devoting a significant portion of our capital to store remodels to keep the Nordstrom experience current
for all our customers. In 2007, we invested $106 million in remodels and expect to invest similar amounts going forward.
We also see tremendous opportunities for Nordstrom Direct, our online and catalog business, which has now grown to over
$600 million in volume. However, this number underrepresents the true value of this channel. We gain additional value from
the volume attributed to the full-line division from sales initiated online in our stores, as well as immense value from being
a multi-channel retailer — satisfying customers the way they want to be served today. In addition to our full-line and Nordstrom
Direct channels, we are also serving many customers in our Nordstrom Rack stores. The division had another successful year
with an 8.7% comparable sales increase in 2007, on top of a double-digit increase in the prior year.
Every decision made and dollar spent by our company revolves around the customer. One long-term initiative that began in
response to customer requests is creating technology that will enable our salespeople to have a single view of total company
inventory. To that end, we are excited to announce that we have taken a major step forward on this initiative and will have this
tool in place by late spring, making it easier for salespeople to find merchandise for customers. Another tool that has helped us
gain share of wallet is our enhanced Nordstrom Fashion Rewards™ program, designed to reward our best customers.
This program is generating many additional customers loyal to Nordstrom.