Ross 2006 Annual Report Download - page 23

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5
Distribution
We have a total of four distribution processing facilities. We lease a 1.3 million square foot distribution center in Perris, California.
We own our 1.3 million square foot distribution center in Fort Mill, South Carolina, which we purchased in 2006, our 685,000
square foot distribution center in Moreno Valley, California, which we purchased in 2005, and our 426,000 square foot distribu-
tion center located in Carlisle, Pennsylvania. We have plans for future expansion at the Moreno Valley, California, distribution
center. See additional discussion in Management’s Discussion and Analysis.
In addition, we lease three separate warehouse facilities for packaway storage, two of which are located in Carlisle, Pennsylvania,
totaling approximately 239,000 and 246,000 square feet, and the third in Fort Mill, South Carolina, totaling 253,000 square feet.
We utilize other third-party facilities as needed for storage of packaway inventory.
In fiscal 2007 we plan to continue to invest in our distribution network by spending approximately $90 million, mainly for the
expansion of our Moreno Valley facility to increase our distribution and packaway storage capacity.
We also utilize third-party cross docks to distribute merchandise to stores on a regional basis. Shipments are made by contract
carriers to the stores from three to five times per week depending on location.
We believe that our existing distribution centers with their expansion capabilities will provide adequate processing capacity to
support store growth into fiscal year 2008.
Information Systems
In fiscal 2006, we continued to invest in new systems and technology to provide a platform for growth over the next several years.
Recent initiatives include the following:
We implemented additional enhancements to our Core Merchandising applications in order to support our continued growth.
We are now in the process of implementing capabilities which we will use to enhance our new store opening process, pre-
season planning, and in-season trending. We plan to roll out these enhancements over the next few years.
We introduced a new store-level Task Management System, which allows us to improve store staff productivity, better
monitor and address problems, and improve two-way communications between corporate personnel and personnel in
the field.
We began a chain level update to our store network in order to increase communication bandwidth while decreasing monthly
recurring costs. We plan to complete this network upgrade in fiscal 2007. This improvement will open the opportunity to
deploy additional capabilities in the stores, to streamline internal processes and to improve operational efficiencies.
We implemented enhancements to our Transportation Management System. These improvements provided increased
supply chain visibility and improved freight routing capabilities.
We implemented additional enhancements to our Warehouse Management System at all distribution centers. These
improvements provided increased operational and inventory control, as well as improved transaction accountability.
Advertising
We rely primarily on television advertising to communicate the Ross value proposition—brand-name merchandise at low every-
day prices. This strategy reflects our belief that television is the most efficient and cost-effective medium for communicating
everyday savings on a wide selection of brand-name bargains for both the family and home. Advertising for dd’s DISCOUNTS is
primarily focused on new store grand openings.
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