Nordstrom 2008 Annual Report Download - page 54

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54
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share and per option amounts
NOTE 15: SEGMENT REPORTING
We offer three main channels through which our customers can shop: full-line and Rack retail stores and Nordstrom Direct (online and catalog). Our
goal is to create an integrated, consistent merchandise offering for our customers regardless of which channel they choose. These three channels
meet the aggregation criteria set forth in Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and
Related Information
(“SFAS 131”) with the exception of “distribution method.” Nordstrom Direct sells merchandise via our online store and the
catalog as opposed to in a retail store. As such, we aggregate our full-line and Rack stores into the Retail Stores segment and report Direct as a
separate segment.
The Credit segment earns finance charges and late fee income through operation of the Nordstrom private label and Nordstrom VISA credit cards.
The Other segment includes our product development group, which coordinates the design and production of private label merchandise sold in our
retail stores, and our distribution network. This segment also includes our corporate center operations. During the time that we owned it, this
segment also included the operations of our Façonnable business.
The segment information for 2007 and 2006 has been reclassified from our previous disclosures to reflect how we currently view our business.
These changes include the 2008 view of interest expense between our Credit and Other segments and the 2008 view of our sales return reserve
between our Direct and Other segments. These changes do not impact the consolidated statements of earnings.
The following table summarizes net sales by merchandise category:
Fiscal year 2008 2007 2006
Women’s apparel $2,812 $3,063 $2,963
Shoes 1,721 1,784 1,731
Men’s apparel 1,362 1,571 1,561
Women’s accessories 963 941 848
Cosmetics 921 950 942
Children’s apparel 269 285 286
Other 224 234 230
Total $8,272 $8,828 $8,561
The following table presents our sales by merchandise category as a percentage of net sales:
Fiscal year 2008 2007 2006
Women’s apparel 34% 35% 35%
Shoes 21% 20% 20%
Men’s apparel 16% 18% 18%
Women’s accessories 12% 11% 10%
Cosmetics 11% 11% 11%
Children’s apparel 3% 3% 3%
Other 3% 2% 3%
Total 100% 100% 100%
In general, we use the same measurements to compute earnings before income taxes for reportable segments as we do for the consolidated
company. However, redemptions of our Nordstrom Notes® are included in net sales for our Retail Stores segment. The sales amount in our Other
segment includes an entry to eliminate these transactions from our consolidated net sales. There is no impact to consolidated earnings before
income taxes for this adjustment. In addition, our sales return reserve and other corporate adjustments are recorded in the Other segment. Other
than described above, the accounting policies of the operating segments are the same as those described in the summary of significant accounting
policies in Note 1.