Nordstrom 2009 Annual Report Download - page 3

We made significant headway in our business this past year, emerging stronger than we were before
the downturn that began nearly two years ago. Throughout, we’ve tried to keep a steady focus on
our customers. We follow, first and foremost, a customer strategy at Nordstrom — not a price, brand,
technology or any other corporate strategy. We believe it is this singular focus on our customers that has
kept us disciplined, guided careful decision making and enabled us to take advantage of opportunities.
Let’s briefly recap some of our 2009 results:
• Net earnings of $441 million, a 9.9% increase from the prior year.
• Total retail sales decrease of 0.2% to $8.26 billion, and same-store sales decline of 4.2% for
the year.
• Higher gross prot driven by more regular price selling.
• Free cash ow of $579 million.
• Inventory turn of 5.4, a historically high rate for our business.
Our performance last year exceeded our expectations and put us in a better position both financially and
competitively. We achieved our results by seeing the business through the eyes of our customers. This
led us to enhanced service, merchandise that is more current and compelling, improvements to our multi-
channel capabilities and continued discipline in the way we manage our business.
A COMPELLING OFFERING
One of the ways we created closer alignment with customers was through our merchandise mix. In a
historically challenging year, our buyers had much at stake and the strength of our vendor relationships
mattered more than ever. We planned cautiously so that we could maximize our merchandise flexibility
and evolve with our customers. With inventory, we were careful to stay in line with sales trends while
bringing in merchandise that resonated with our customers.
Even in tough times, we wanted to be able to deliver on our customers’ expectations. We found ways
to continue leveraging our broad, diverse merchandise offering that reflected our customers’ desire
for value, quality and newness. We moved quickly to provide new merchandise as customers started to
respond. Our merchandise is now as current as it’s ever been, and there is a steady flow of new fashion
into our stores.
MULTI-CHANNEL PROGRESS
We know more of our customers are choosing to shop with us in different ways. Customers don’t see
a distinction between a Nordstrom store, nordstrom.com or our catalogs. To them, it’s just Nordstrom,
and they want a consistently great shopping experience no matter where or how they choose to shop.
In fall of 2009, we took a big step forward in serving customers across multiple channels by creating
shared inventory between our full-line stores and nordstrom.com. Now, online customers can access
merchandise no matter where it is located. If we are out of stock of an item at our fulfillment center, our
systems instantly locate whether it is at any of our full-line stores and we can fulfill the online order at
the store level.
As a result, customers are able to find what they are looking for more often from us online. Shopping
across channels is more convenient. From a business standpoint, this capability greatly improved
efficiency, enabling us to turn inventory faster and bring in newer merchandise.
We view these and other multi-channel improvements as simply another means to create a seamless
shopping experience for customers. Ultimately, our goal is to enable the customer to shop with us on
their terms — 24 hours a day, 7 days a week.