Ross 2015 Annual Report Download - page 15

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13
Merchandising. Our merchandising strategy incorporates a combination of off-price buying techniques to purchase
advance-of-season, in-season, and past-season merchandise for both Ross and dd’s DISCOUNTS. We believe nationally
recognized name brands sold at compelling discounts will continue to be an important determinant of our success. We
generally leave the brand name label on the merchandise we sell.
We have established merchandise assortments that we believe are attractive to our target customers. Although we offer
fewer classifications of merchandise than most department stores, we generally offer a large selection within each
classification with a wide assortment of vendors, labels, prices, colors, styles, and fabrics within each size or item. Our
merchandise offerings include, but are not limited to, apparel (including footwear and accessories), small furniture, home
accents, bed and bath, toys, luggage, gourmet food, cookware, watches, and sporting goods.
Purchasing. We have a combined network of approximately 8,300 merchandise vendors and manufacturers for both Ross
and dd’s DISCOUNTS and believe we have adequate sources of first-quality merchandise to meet our requirements. We
purchase the vast majority of our merchandise directly from manufacturers, and we have not experienced any difficulty in
obtaining sufficient merchandise inventory.
We believe our ability to effectively execute certain off-price buying strategies is a key factor in our success. Our buyers use
a number of methods that enable us to offer our customers brand name and designer merchandise at strong discounts every
day relative to department and specialty stores for Ross and moderate department and discount stores for dd’s
DISCOUNTS. By purchasing later in the merchandise buying cycle than department, specialty, and discount stores, we are
able to take advantage of imbalances between retailers’ demand for products and manufacturers’ supply of those products.
Unlike most department and specialty stores, we typically do not require that manufacturers provide promotional allowances,
co-op advertising allowances, return privileges, split shipments, drop shipments to stores, or delayed deliveries of
merchandise. For most orders, only one delivery is made to one of our six distribution centers. These flexible requirements
further enable our buyers to obtain significant discounts on in-season purchases.
The majority of the apparel and apparel-related merchandise that we offer in all of our stores is acquired through
opportunistic purchases created by manufacturer overruns and canceled orders both during and at the end of a season.
These buys are referred to as "close-out" purchases. Close-outs can be shipped to stores in-season, allowing us to get in-
season goods into our stores at great values or can be stored as packaway merchandise.
Packaway merchandise is purchased with the intent that it will be stored in our warehouses until a later date, which may
even be the beginning of the same selling season in the following year. Packaway purchases are an effective method of
increasing the percentage of prestige and national brands at competitive savings within our merchandise assortments.
Packaway merchandise is mainly fashion basics and, therefore, not usually affected by shifts in fashion trends.
In fiscal 2015, we continued our emphasis on this important sourcing strategy in response to compelling opportunities
available in the marketplace. Packaway accounted for approximately 47% and 45% of total inventories as of January 30,
2016 and January 31, 2015, respectively. We believe the strong discounts we are able to offer on packaway merchandise
are one of the key drivers of our business results.
Our primary buying offices are located in New York City and Los Angeles, the nation's two largest apparel markets. These
strategic locations allow our buyers to be in the market on a daily basis, sourcing opportunities and negotiating purchases
with vendors and manufacturers. These locations also enable our buyers to strengthen vendor relationships—a key element
to the success of our off-price buying strategies.