Nordstrom 2010 Annual Report Download - page 12

4
PART I
Item 1. Business.
DESCRIPTION OF BUSINESS
Founded in 1901 as a retail shoe business in Seattle, Nordstrom later incorporated in the state of Washington in 1946. We are one of the nation’s leading
fashion specialty retailers, with 207 U.S. stores located in 28 states as of March 18, 2011. The west and east coasts are the areas in which we have the
largest presence. We have two reportable segments: Retail and Credit.
The Retail segment includes our 115 ‘Nordstrom’ full-line stores, our Nordstrom online store at www.nordstrom.com, 89 off-price ‘Nordstrom Rack’
stores, two ‘Jeffrey’ boutiques and one clearance store that operates under the name ‘Last Chance.’ Through these multiple retail channels, we offer
our customers a wide selection of high-quality brand name and private label merchandise focused on apparel, shoes, cosmetics and accessories. Our
Nordstrom full-line stores and online store are substantially integrated, allowing us to provide our customers with a seamless shopping experience
across channels. Our online store’s merchandise is primarily shipped from our fulfillment center in Cedar Rapids, Iowa and we have the ability to fulfill
online orders from any of our Nordstrom full-line stores. Additionally we offer our customers the option to purchase items on our website and pick
them up in our Nordstrom full-line stores. These capabilities allow us to better serve customers across various channels and improve sales. The
Nordstrom Rack stores purchase high-quality name brand merchandise directly from vendors and also serve as outlets for clearance merchandise
from our Nordstrom stores.
Our Credit segment includes our wholly owned federal savings bank, Nordstrom fsb, through which we provide a private label credit 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. Although the primary purpose of our Credit business is to foster greater customer loyalty and drive more
sales, we also generate revenues through finance charges and other fees on these cards.
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 17 and Note 14 of the Notes to Consolidated Financial Statements in Item 8.
FISCAL YEAR
We operate on a 52/53-week fiscal year ending on the Saturday closest to January 31st. References to 2010, 2009 and 2008 relate to the 52-week fiscal
years ended January 29, 2011, January 30, 2010 and January 31, 2009. References to 2011 relate to the 52-week fiscal year ending January 28, 2012.
TRADEMARKS
We have 119 trademarks, each of which is the subject of one or more trademark registrations and/or trademark applications. Our most notable
trademarks include Nordstrom, Nordstrom Rack, Halogen, Caslon, Classiques Entier, John W. Nordstrom and BP. 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 liberal return policy at our Nordstrom full-line stores and online at www.nordstrom.com. Our Nordstrom Rack stores accept
returns up to 30 days from the date of purchase with the original price tag and sales receipt. In general, our return policy is considered to be more
generous than industry standards.
SEASONALITY
Due to our Anniversary Sale in July, the holidays in December and the half-yearly sales that occur in the second and fourth quarters, our sales are
typically higher 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 expected sales trends. 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.
In order to offer merchandise that our customers want, we purchase merchandise from a wide variety of high-quality suppliers, including domestic and
foreign businesses. We also have arrangements with agents and contract manufacturers to produce our private label merchandise. We expect our
suppliers to meet our “Nordstrom Partnership Guidelines,” which address our corporate social responsibility standards for matters such as legal and
regulatory compliance, labor, health and safety and the environment.
COMPETITIVE CONDITIONS
We operate in a highly competitive business environment. We compete with other national, regional and local retail establishments that may carry
similar lines of merchandise, including department stores, specialty stores, boutiques and Internet businesses. Our specific competitors vary from
market to market. We believe the keys to competing in our industry include, first and foremost, customer service, fashion newness, quality of product,
the shopping experience across all channels, depth of selection, store environment and location.