Ross 2006 Annual Report Download - page 20

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2
PART I
Item 1. Business.
Ross Stores, Inc. and its subsidiaries (“we” or the “Company”) operate two chains of off-price retail apparel and home acces-
sories stores. At February 3, 2007, there were 771 Ross Dress for Less® (“Ross”) locations in 27 states and Guam and 26 dd’s
DISCOUNTS® stores in California. Both chains target value-conscious women and men between the ages of 18 and 54. Ross
customers are primarily from middle income households, while the dd’s DISCOUNTS target customer is typically from lower
income households. The decisions we make, from merchandising, purchasing and pricing, to the locations of our stores, are
aimed at these customer bases.
Ross offers first-quality, in-season, name-brand and designer apparel, accessories, footwear and home merchandise for the
entire family at everyday savings of 20% to 60% off department and specialty store regular prices. dd’s DISCOUNTS features
more moderately-priced assortments of first-quality, in-season, name-brand and fashion apparel, accessories, footwear and
home merchandise for the entire family at everyday savings of 20% to 70% off moderate department and discount store regular
prices. We believe that both Ross and dd’s DISCOUNTS derive a competitive advantage by offering a wide assortment of prod-
uct within each of our merchandise categories in organized and easy-to-shop store environments.
Our mission is to offer competitive values to our target customers by focusing on the following key strategic objectives:
Achieve an appropriate level of recognizable brands, labels and fashions at strong discounts throughout the store.
Meet customer needs on a more regional and local basis.
Deliver an in-store shopping experience that reflects the expectations of the off-price customer.
Manage real estate growth to compete effectively across all of our markets.
The original Ross Stores, Inc. was incorporated in California in 1957. In August 1982, the Company was purchased by some of
our then and current directors and stockholders. In June 1989, we reincorporated in the state of Delaware. In 2004, we opened
our first dd’s DISCOUNTS locations.
We refer to our fiscal years ended February 3, 2007, January 28, 2006 and January 29, 2005 as fiscal 2006, fiscal 2005, and fiscal
2004, respectively.
Merchandising, Purchasing and Pricing
We seek to provide our customers with a wide assortment of first-quality, in-season, brand-name and fashion apparel, acces-
sories, footwear and home merchandise for the entire family at everyday savings of 20% to 60% below regular department and
specialty store prices at Ross, and 20% to 70% below moderate department and discount store prices at dd’s DISCOUNTS. We
sell recognizable branded merchandise that is current and fashionable in each category. New merchandise typically is received
from three to five times per week at both Ross and dd’s DISCOUNTS stores. Our buyers review their merchandise assortments
on a weekly basis, enabling them to respond to selling trends and purchasing opportunities in the market. Our Ross merchan-
dising strategy is reflected in our television advertising for our Ross stores, which emphasizes a strong value message—our
customers will find great savings every day on a broad assortment of brand-name merchandise.
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 of brand names within each
classification with a wide assortment of vendors, labels, prices, colors, styles and fabrics within each size or item. Over the past
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