Dillard's 2012 Annual Report Download - page 5

PART I
ITEM 1. BUSINESS.
Dillard’s, Inc. (‘‘Dillard’s’’, the ‘‘Company’’, ‘‘we’’, ‘‘us’’, ‘‘our’’ or ‘‘Registrant’’) ranks among the
nation’s largest fashion apparel, cosmetics and home furnishing retailers. The Company, originally
founded in 1938 by William T. Dillard, was incorporated in Delaware in 1964. As of February 2, 2013,
we operated 302 Dillard’s stores, including 18 clearance centers, and an Internet store offering a wide
selection of merchandise including fashion apparel for women, men and children, accessories,
cosmetics, home furnishings and other consumer goods. The Company also operates a general
contracting construction company, CDI Contractors, LLC and CDI Contractors, Inc. (‘‘CDI’’), whose
business includes constructing and remodeling stores for the Company.
The following table summarizes the percentage of net sales by segment and major product line:
Percentage of Net Sales
Fiscal Fiscal Fiscal
2012 2011 2010
Retail operations segment:
Cosmetics ..................................... 15% 15% 15%
Ladies’ apparel ................................. 22 23 23
Ladies’ accessories and lingerie ...................... 15 14 14
Juniors’ and children’s apparel ...................... 8 8 8
Men’s apparel and accessories ....................... 17 17 17
Shoes ........................................ 16 16 15
Home and furniture .............................. 5 6 6
98 99 98
Construction segment .............................. 2 1 2
Total ........................................... 100% 100% 100%
Additional information regarding our business, results of operations and financial condition,
including information pertaining to our reporting segments, can be found in Management’s Discussion
and Analysis of Financial Condition and Results of Operations in Item 7 hereof and in Note 2 of
‘‘Notes to Consolidated Financial Statements’’ in Item 8 hereof.
We operate retail department stores in 29 states, primarily in the southwest, southeast and midwest
regions of the United States. Most of our stores are located in suburban shopping malls and open-air
centers. Customers may also purchase our merchandise on-line at our website, www.dillards.com, which
features on-line gift registries and a variety of other services.
Our retail merchandise business is conducted under highly competitive conditions. Although we are
a large regional department store, we have numerous competitors at the national and local level that
compete with our individual stores, including specialty, off-price, discount and Internet retailers.
Competition is characterized by many factors including location, reputation, merchandise assortment,
advertising, price, quality, operating efficiency, service and credit availability. We believe that our stores
are in a strong competitive position with regard to each of these factors. Other retailers may compete
for customers on some or all of these factors, or on other factors, and may be perceived by some
potential customers as being better aligned with their particular preferences.
Our merchandise selections include, but are not limited to, Dillard’s lines of exclusive brand
merchandise such as Antonio Melani, Gianni Bini, Roundtree & Yorke and Daniel Cremieux. Dillard’s
exclusive brands/private label merchandise program provides benefits for Dillard’s and our customers.
Our customers receive fashionable, higher quality product often at a savings compared to national
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