Nordstrom 2015 Annual Report Download - page 4

PART I
Item€1. Business.
DESCRIPTION OF BUSINESS
Founded in 1901 as a retail shoe business in Seattle, Nordstrom later incorporated in Washington state in 1946 and went on to become one
of the leading fashion specialty retailers based in the U.S. As of March•14, 2016, we operate 323 U.S. stores located in 39 states as well as a
robust ecommerce business through Nordstrom.com, Nordstromrack.com/HauteLook and TrunkClub.com. We also operate three Nordstrom
full-line stores in Canada. The west and east coasts of the U.S. are the areas in which we have the largest presence. We have two reportable
segments, which include Retail and Credit.
As of March•14, 2016, the Retail segment includes our 118 Nordstrom-branded full-line stores in the U.S. and Nordstrom.com, 197 off-price
Nordstrom Rack stores, three Canada full-line stores, Nordstromrack.com/HauteLook, five Trunk Club clubhouses and TrunkClub.com, our
two Jeffrey boutiques and one clearance store that operates under the name ‚Last Chance.ƒ Through these multiple retail channels, we strive
to deliver the best customer experience possible. We offer an extensive selection of high-quality brand-name and private label merchandise
focused on apparel, shoes, cosmetics and accessories. Our integrated Nordstrom full-line stores and online store allow us to provide our
customers with a seamless shopping experience. In-store purchases are primarily fulfilled from that store€s inventory, but when inventory is
unavailable at that store it may also be shipped to our customers from our fulfillment centers in Cedar Rapids, Iowa and Elizabethtown,
Pennsylvania, or from other Nordstrom full-line stores. Online purchases are primarily shipped to our customers from our Cedar Rapids and
East Coast fulfillment centers, but may also be shipped from our Nordstrom full-line stores. Our customers can also pick up online orders in
our Nordstrom full-line stores if inventory is available at one of our locations. These capabilities allow us to better serve customers across
various channels and improve sales. Nordstrom Rack stores purchase merchandise primarily from the same vendors carried in Nordstrom
full-line stores and also serve as outlets for clearance merchandise from our Nordstrom stores and other retail channels. Nordstromrack.com/
HauteLook offers a persistent selection of off-price merchandise, as well as limited-time sale events on fashion and lifestyle brands and are
integrated with a single customer log-in, shared shopping cart and streamlined checkout process. Nordstromrack.com combines the
technology expertise of HauteLook with the merchant expertise of Nordstrom Rack. Online purchases are primarily shipped to our customers
from our San Bernardino fulfillment center. Furthermore, we can accommodate returns from these sites by mail or at any Nordstrom Rack
location.
Through our Credit segment, our customers can access a variety of payment products and services, including a Nordstrom-branded private
label card, two Nordstrom-branded Visa credit cards and a debit card for Nordstrom purchases. The credit and debit cards feature a loyalty
program designed to increase customer visits and spending. Although the primary purposes of our Credit segment are to foster greater
customer loyalty and drive more sales, through our program agreement with TD Bank, N.A. (‚TDƒ) (see Note 2: Credit Card Receivable
Transaction in Item 8), we also receive credit card revenue. In addition, we save on interchange fees that the Retail segment would incur if
our customers used non-Nordstrom-branded 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 and Note 17: Segment Reporting in Item•8.
FISCAL YEAR
We operate on a 52/53-week fiscal year ending on the Saturday closest to January•31st. References to 2015 and all years within this
document are based on a 52-week fiscal year, except 2012, which is based on a 53-week fiscal year.
TRADEMARKS
We have 147 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, HauteLook, Trunk Club, Halogen, BP., Zella, 14th & Union, Tucker+Tate and
Caslon. Each of our trademarks is renewable indefinitely, provided that it is still used in commerce at the time of the renewal.
RETURN POLICY
We have a fair and liberal approach to returns as part of our objective to provide high-quality customer service. We do not have a formal
return policy at our Nordstrom full-line stores or online at Nordstrom.com. Our goal is to take care of our customers, which includes making
returns and exchanges easy, whether in stores or online, where we offer free shipping on purchases and returns. Our Nordstrom Rack stores
generally accept returns up to 90 days from the date of purchase with the original price tag and sales receipt, and also accept returns of
Nordstromrack.com/HauteLook merchandise. Nordstromrack.com/HauteLook generally accept returns of apparel, footwear and accessories
within 90 days from the date of shipment.
SEASONALITY
Our business, like that of other retailers, is subject to seasonal fluctuations. Due to our Anniversary Sale in July and the holidays in the fourth
quarter, our sales are typically higher in the second and fourth quarters than in the first and third quarters of the fiscal year. In 2016, our
Anniversary Sale will shift to the last week of July and the first week of August, which will move one week of event sales to the third quarter.
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