Nordstrom 2008 Annual Report Download - page 4

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PART I
Item 1. Business.
DESCRIPTION OF BUSINESS
Nordstrom incorporated in the state of Washington in 1946 as the successor to a retail shoe business that started in 1901. We are one of the nation’s
leading fashion specialty retailers, with 171 U.S. stores located in 28 states as of March 20, 2009. The west coast and east coast are the areas in which
we have the largest presence. Nordstrom is comprised of four segments: Retail Stores, Direct, Credit, and Other.
Retail Stores derives its revenues from sales of high-quality apparel, shoes, cosmetics and accessories. It includes our 109 ‘Nordstrom’ full-line stores,
58 off-price ‘Nordstrom Rack’ stores, two clearance stores that operate under the name ‘Last Chance,’ and two ‘Jeffrey’ boutiques. The Nordstrom Rack
stores purchase merchandise directly from manufacturers and also serve as outlets for clearance merchandise from our full-line stores.
In 2008, we opened eight full-line stores (Aventura, Florida; Honolulu, Hawaii; Burlington, Massachusetts; Clinton Township, Michigan; Thousand Oaks,
California; Indianapolis, Indiana; Pittsburgh, Pennsylvania; and Naples, Florida), relocated one full-line store (Tacoma, Washington) and opened six Rack
stores (White Plains, New York; Laguna Hills, California; Naperville, Illinois; Lyndhurst, Ohio; Danvers, Massachusetts; and San Antonio, Texas). To date in
2009, we have relocated one full-line store (Murray, Utah) and opened two new Rack stores (Paramus, New Jersey and Dallas, Texas). During the
remainder of 2009, we are scheduled to open three full-line stores (Cherry Hill, New Jersey; Peabody, Massachusetts; and Cincinnati, Ohio) and open
eight additional Rack stores (Sandy, Utah; Orland Park, Illinois; East Palo Alto, California; Los Angeles, California; Southlake, Texas; Orlando, Florida;
Pasadena, California; and Cincinnati, Ohio). In 2010, we are scheduled to open three full-line stores, relocate one full-line store and open four
Rack stores.
Direct generates revenues from sales of high-quality apparel, shoes, cosmetics and accessories by serving our customers on the Internet at
www.nordstrom.com and through our catalogs. The Direct segment’s sales are primarily shipped via third-party carriers from our fulfillment center in
Cedar Rapids, Iowa.
Through our wholly owned federal savings bank, Nordstrom fsb, we offer a private label card, two Nordstrom VISA credit cards and a debit card for
Nordstrom purchases. The credit and debit cards feature a shopping-based loyalty program designed to increase customer visits and spending in our
Retail Stores and Direct segments. Our Credit segment generates income through finance charges and other fees on these cards.
Our Other segment includes our product development team, called Nordstrom Product Group, which designs and contracts to manufacture private label
merchandise sold in our Retail Stores and Direct. In addition, this segment includes our corporate center operations. During the time that we owned it,
this segment also included the operations of our Façonnable business.
For more information about our business and our reportable segments, see Item 7, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” on page 15 and Note 15 of the Notes to Consolidated Financial Statements in Item 8.
FISCAL YEAR END
Our fiscal year ends on the Saturday closest to January 31st. References to 2008 relate to the 52-week fiscal year ended January 31, 2009.
References to 2007 and 2006 relate to the 52-week fiscal year ended February 2, 2008 and 53-week fiscal year ended February 3, 2007, respectively.
Fiscal year 2006 includes an extra week (the 53rd week) as a result of our 4-5-4 retail reporting calendar. References to 2009 relate to the 52-week
fiscal year ending January 30, 2010.
TRADEMARKS
We have approximately 139 registered trademarks or trademark applications. Our most notable trademarks include Nordstrom, Nordstrom Rack,
John W. Nordstrom, Caslon, and Classiques Entier. Each of our trademarks is renewable indefinitely provided that it is still used in commerce
at the time of the renewal.
RETURN POLICY
We offer our customers a fair and liberal return policy at our full-line stores and Nordstrom Direct (online and catalog). Our Nordstrom Rack stores
accept returns up to 30 days from the date of purchase. In general, our return policy is somewhat more generous than industry standards.
We utilize historical return patterns to estimate our expected returns.
SEASONALITY
Due to our Anniversary Sale in July and the holidays in December, historically, sales are higher for our Retail Stores and Direct in the second and fourth
quarters of the fiscal year than in the first and third quarters.
INVENTORY
We plan our merchandise purchases and receipts to coincide with the selling patterns that we expect. For instance, our merchandise purchases and
receipts increase prior to our Anniversary Sale, which extends over the last two weeks of July. Also, we purchase and receive a larger amount of
merchandise in the fall as we prepare for the holiday shopping season (from late November through early January). We pay for our merchandise
purchases under the terms established with our vendors.