Nordstrom 2009 Annual Report Download - page 6

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Adversity is a great test of character. How a company responds under difficult circumstances tells you a lot
about the true qualities of the business and the people behind it. During an extraordinarily turbulent time
in fashion retail and the broader economy, Nordstrom performed admirably in 2009. With continued focus
on the customer, the company strengthened its financial condition and firmly positioned itself for growth.
This past year proved the axiom that where there are challenges, there are opportunities. In spite of
a difficult sales environment, the company developed and employed a more efficient and profitable
business model, made strategic investments, increased market share and, most important, found new
ways to take care of customers. Nordstrom is a company that is evolving in step with its customers and
preparing to serve them in new and better ways in the future.
In 2009 the company increased free cash flow and strengthened its fundamentals. Earnings Before
Interest and Income Taxes (EBIT) and Return on Invested Capital, important measures for our shareholders,
improved over the prior year. The company managed working capital well while also maintaining
investment grade credit ratings. All of these factors should provide Nordstrom with an advantage in the
marketplace and enhanced flexibility.
In my letter last year, I said that changes in the marketplace presented opportunities for Nordstrom, and
it has been encouraging to see the company effectively take advantage of many. The progress made
during 2009 in the multi-channel aspect of our business is a good example of an initiative on which the
board has long been focused. The company was able to make the shopping experience more seamless
for customers this past year by linking its online and in-store inventory, thereby increasing merchandise
availability on nordstrom.com.
As members of the Board of Directors, we are accountable for ensuring that the principles, policies and
people are in place to take Nordstrom in the right direction on behalf of our shareholders, a responsibility
we take seriously. We believe in following sound practices and operating transparently, and took steps
last year to refresh our review and oversight capabilities by rotating some of our committee chair
responsibilities. We remain committed to maintaining a strong, diverse and independent board and will
continue looking for ways to improve our ability to govern to the highest standards.
Our unwavering focus on improving customer service at Nordstrom will not change — in fact,
we believe it is this commitment that drives results and will continue to define success for
Nordstrom. We are confident the business is in good hands and run with the utmost integrity.
On behalf of the entire Board of Directors, thank you for your support.
Enrique Hernandez, Jr.
Chairman