What makes Nordstrom unique?
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Financial Highlights
Dollars in thousands except per share amounts
Fiscal Year
Net sales
Earnings before income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Dividends paid per share
2000
$5,528,537
167,018
101,918
0.78
0.78
0.35
1999
% Change
$5,149,266
332,057
202,557
1.47
1.46
0.32
7.4
(49.7)
(49.7)
(46.9)
(46.6)
9.4
Stock Prices
Fiscal Year
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2000
1999
high
low
high
low
34.50
30.00
19.50
21.00
18.25
16.56
14.19
14.88
44.81
39.38
33.13
28.00
34.63
30.38
23.13
21.31
Nordstrom, Inc. common stock is traded on the New York Stock Exchange
NYSE Symbol-JWN.
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1991
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1998
1999
2000
Net Sales
Dollars in Millions
Comparable Store Sales
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1991
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Total Square Footage
In Thousands
Diluted Earnings Per Share
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2001 Annual Report • 44pgs. + 4 covers pg. IFC
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Table of Contents
14 Management’s
Discussion and Analysis
19 Consolidated Statements
of Earnings
20 Consolidated Balance
Sheets
21 Consolidated Statements
of Shareholders’ Equity
22 Consolidated Statements
of Cash Flows
23 Notes to Consolidated
Financial Statements
38 Ten-Year Statistical
Summary
40 Management and
Independent Auditors’
Reports
41 Officers of the
Corporation
42 Directors and
Committees
43 Retail Store Facilities
45 Shareholder Information
View this entire
report online.
Please visit
www.nordstrom.com
to see this report and
obtain the latest available
information.
It’s written all over our faces.
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“Through this door pass the most
courteous people in the world.”
Sign inside Nordstrom employee entrance, many locations
When you hear the word Nordstrom, what immediately comes to mind?
A great new outfit? Your favorite weekend sweater? That perfect pair of
shoes? Perhaps. But chances are, the first thing that comes to mind is a person.
The person who showed you the outfit. Sold you the sweater. Helped you find
those shoes. A friendly person. A knowledgeable person. A person with
whom you somehow just, well, clicked.
This person you can picture so vividly represents the very foundation of our
company. The essence of our culture. What sets us apart. This, of course, is the
Nordstrom salesperson.
They come in all shapes and sizes. All colors and creeds. All ages and lifestyles.
Each is very different. Yet all share one common trait. These are people who
genuinely like other people. Who enjoy sharing a smile, or a story. Who
actually experience a sense of joy in seeing someone walk away happy.
Obviously, we are very proud of our folks on the front lines, whether they’re
fitting you in a pair of shoes, fulfilling an order on our Web site or answering a
question about your Nordstrom Visa® account. They are the ones we rely on to
uphold the standards that have been set, and who will continue to build upon
these standards, one customer at a time.
Mickey Shapiro, a top shoe
salesperson in our Old
Orchard store in Skokie,
Illinois, has been with
Nordstrom but a short
time, yet has already made
his mark. Actually, Mickey
has been in the shoe
business for years, having
previously run his own
shoe store on Michigan
Avenue in Chicago. His
vast experience offers him
the opportunity to help the
less-experienced members
of the team, who regularly
seek out Mickey for
advice. Hard telling who
enjoys it more.
Jeanne Breinholt is the
manager of the Nordstrom
Rack at Sugarhouse
Square in Utah. In her
Nordstrom career, she has
worked in many different
departments throughout
the store, and was once
recognized as a Customer
Service All-Star while
selling cosmetics. Jeanne
really relishes her current
role, however, in that it
allows her the chance to
mentor the Nordstrom
leaders of tomorrow.
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“We’re thankful to have customers
that care enough about our store and
merchandise to tell us how they feel.”
Pete Nordstrom, investors conference, December 6, 2000 in New York City
Over the past year, you undoubtedly noticed some changes at Nordstrom.
Changes in the way we presented ourselves. In our selection of merchandise.
In the look and feel of our stores. All of these changes represented an attempt
to address certain customers’ desire for more updated fashion options. And, at
the same time, to expand our customer base. Many customers liked what they
saw. Many did not. In the business of fashion, change is not only essential, it’s a
driving force. But it’s clear to us now that in our efforts to move quickly and
adjust our merchandise offering and presentation, we confused many of our
most loyal customers. And many of our employees, as well.
Like many of our
customers, Nita Hawkins
has, in her words, "a
passion for fashion." This
passion translates into
keen interest in trends and
great product knowledge.
The beneficiaries, of
course, are Nita’s
customers, who enjoy
sharing with her their love
of style, and trust her to
help them look their very
best. Nita has been with
Nordstrom going on nine
years now, and currently
works in Studio 121 at
Perimeter Mall in Atlanta.
She has achieved
Pacesetter each of her
eight years with the
company and is a two-time
Customer Service All-Star.
If that weren’t enough,
Nita even got to live out
her dream of being
a runway model during a
Nordstrom fashion show in
San Diego.
Yolanda Larson is the
manager of the Studio 121
department at our Fashion
Valley store in San Diego.
Her Nordstrom career
started in 1992 when she
helped open the Mall of
America store near
Minneapolis. In fact, she
became an All-Star that
very first year. Yolanda has
also been a Pacesetter.
Perhaps more telling,
however, is the fact that
she currently has seven
Pacesetters on her staff,
a true testament to her
incredible leadership
abilities.
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“The number one thing about Nordstrom?
It has to be our people. Their performance.
Their actions. Our job is to support those folks.”
Blake Nordstrom, investors conference, December 6, 2000, New York City
It has become apparent to all of us within the company that we must direct
our focus to our greatest asset: our people on the front lines. History has
proven that when we follow their lead, and address their needs, they feel
empowered to address the needs of our customers. They become confident in
their own ability to follow through. And gain a sense of ownership for
everything they do.
Well under way are initiatives designed to reconnect all company resources
with the selling floor. A big part of this, of course, is providing our sales staff
with the right mix of merchandise. In order for our salespeople to be effective,
to truly serve the customer, we must deliver relevant and desirable fashion.
Fashion that people want to wear. Clothing that makes them feel confident,
appropriate and attractive. In other words, we must fill our stores with the
styles our customers are seeking for their everyday lives, whether fashion-
forward and contemporary, or classic and traditional. The key is creating the
right balance.
We believe it all comes back to placing the decision-making process as close to
the customer as possible. To this end, all those who directly support our
frontline personnel — department managers, store managers, buyers — have
been challenged to focus their time and energy prioritizing and acting upon
feedback we receive from our salespeople and customers. We have adapted
our merchandising team to be more responsive to regional preferences, while
at the same time leveraging our size and expertise on a national level.
6
After raising her family,
Elaine Hahs came to work
at our Mall of America
store with no selling
experience. She did,
however, come equipped
with an easy smile and
genuine interest in others.
In the nine years since she
joined the company she
has gained tons of
experience, but cites those
innate personal skills as
the real reason she has
been the number one
salesperson in our Encore
department the last seven
years in a row. Elaine has
also been honored as a
Customer Service All-Star.
As you can tell from
Sidney Johnson’s picture on
the facing page, he is a
pretty friendly and likeable
guy. Unfortunately, our
customers don’t have the
pleasure of seeing Sidney’s
sunny smile. You see,
Sidney is a Customer
Service Representative at
nordstrom.com, whose job
it is to take orders and
assist customers over the
phone. Regardless, his
helpful nature comes
shining through. But don’t
let his pleasant demeanor
fool you, he’ll relentlessly
track down an item for a
customer if that’s what it
takes to make her happy.
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Shelton Cole works in our
Men’s Clothing department
at Tacoma Mall, but his
career at Nordstrom has
taken him to both Chicago
and Las Vegas as a four-
time winner of the Hart
Schaffner & Marx annual
contest as the company’s
number one seller of their
suits. He also took part in
an international clothing
seminar in Taiwan at the
request of one of his loyal
customers. Shelton has
twice been honored as a
Customer Service All-Star.
Like many Nordstrom
employees, David Ben Ami
often receives letters from
customers grateful for the
service he provided. What
may surprise you, however,
is that David works in our
Credit Office — and the
letters he’s gotten are from
people he called because
they were behind on their
payments or had other
issues with their accounts.
They wrote, in short,
because David showed
compassion for the
situation and conveyed a
sincere desire to help.
Regardless of the
challenge, David’s sense of
fairness and compassion
always come across loud
and clear.
In today’s highly competitive and constantly evolving retail environment,
we need to provide our people with the tools they need to compete. A top
priority in the company today is our perpetual inventory management system.
When fully operational, it will enable a salesperson to track down an item for
a customer from anywhere in the company in the time it takes to ring up
the sale.
Without a doubt, there are plenty of opportunities to improve our
performance within our existing operations. We are currently coordinating
our efforts behind the scenes to maximize efficiency. And in keeping with our
plan to direct our attention and energies to the point-of-sale, some of the
savings realized behind the scenes will be funneled back to the sales floor. In
effect, reinvesting in our people and level of service they provide, thus
reinforcing our primary point of difference.
“It’s no secret that Nordstrom’s customer
service ethic is what built this company’s
reputation. And, after all, without that
reputation we would be just another store.”
Bruce Nordstrom, excerpt from employee newsletter, spring 2000
Looking ahead, there are a number of new opportunities to explore; all will be
scrutinized from a more strategic and financial perspective. This past year, we
had several successful full-line store openings, topped by our store on
Michigan Avenue in Chicago, which achieved the highest first-day sales in the
history of Nordstrom. Already in 2001, we opened a new store at North East
Mall in suburban Dallas and replaced our Valley Fair store in San Jose. This
fall brings new full-line stores to Columbus, Ohio; Tampa, Florida and
Chandler, Arizona.
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Our Nordstrom Rack continues to play a vital role in keeping our full-line store merchandise
selection fresh, while offering a comprehensive selection of off-price and special-purchase items.
In addition, this division has proven to be a great training ground for new employees. Ten
Nordstrom Racks were opened in 2000, and eight are scheduled to open in 2001. Last year we
also completed the purchase of Façonnable. This acquisition builds on our extensive history of
effective and profitable partnership with this highly respected French designer, wholesaler and
retailer of high quality men’s and women’s apparel and accessories. We continue to see value in
reaching out to our customers through our Internet and catalog businesses, as well. Indeed, there
are many channels that offer an opportunity to connect with our customers. In the end, we
believe our success as an organization will depend on our ability to consistently provide the
Nordstrom experience regardless of market or medium.
“Our success is solely dependent upon our ability
to support one another and share that expression of courtesy
and respect to each and every customer who
comes in contact with Nordstrom.”
Blake Nordstrom, from message to employees in company newsletter, December 2000
The executive team has been in place since September, although most have been Nordstrom
employees for over 20 years. In fact, most of our executive team members got their start right on
our selling floor, and through hard work, talent and commitment to core company values, find
themselves in a position to help guide the company to reach its fullest potential. To a person, they
are all dedicated to doing whatever it takes to support the true leaders of our company — those
in direct, daily contact with our customers.
As you may know, 2001 marks our 100th year in business. Everyone at Nordstrom can look
back with pride to the many successes and phenomenal growth the company has achieved. We
can also gaze upon a future full of possibilities. The groundwork has been laid. Through the
efforts of so many great employees over the years, we have attempted to develop a truly special
bond with our customers. The attitude and actions of our people are not part of some marketing
strategy, per se, but they are what set us apart in the marketplace. Our future is in their hands,
and therein lies our best opportunity for success.
C e l e b r a t i n g 1 0 0 y e a r s
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Executive Team
Blake Nordstrom
President,
Nordstrom, Inc.
Joined Nordstrom in 1975
Jammie Baugh
Executive Vice President,
Human Resources
Joined Nordstrom in 1974
Gail Cottle
Executive Vice President and
President, Nordstrom Product Group
Joined Nordstrom in 1969
Linda Toschi Finn
Executive Vice President,
Marketing
Joined Nordstrom in 1975
Kevin Knight
Executive Vice President and
President, Nordstrom Credit and Customer
Relationship Marketing
Joined Nordstrom in 1998
Pete Nordstrom
Executive Vice President and
President, Full-line Stores
Joined Nordstrom in 1976
Dan Nordstrom
Chief Executive Officer,
Nordstrom.com
Joined Nordstrom in 1975
Joel Stinson
Executive Vice President,
Chief Administrative Officer
Joined Nordstrom in 1976
Delena Sunday
Executive Vice President,
Diversity Affairs
Joined Nordstrom in 1980
Sue Wilson Tabor
Executive Vice President and
President, Nordstrom Rack
Joined Nordstrom in 1967
The Chief Financial Officer
was not named at press time.
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Rita Noguchi manages the
Narrative department at
our Arden Fair store in
Sacramento. But it’s safe
to say she doesn’t have a
staff so much as she has a
fan club. The fact that
each member of her team
made Pacesetter this past
year, including the #1
Narrative Pacesetter in the
company, only serves to
reinforce the unique
relationship she has with
her team and the role she
plays as mentor and
motivator. Rita also
achieved Pacesetter status
herself once — while
working part time, no less.
When Ada Day walked
through the employee
entrance to interview for a
job at Nordstrom she
noticed a sign above the
door. It read "Through
these doors pass the most
courteous people in the
world" and she
immediately knew it was
the place she wanted to
be. As the Concierge at
our Short Hills store in
New Jersey, Ada is called
upon to live up to this
mantra every day, helping
people with everything and
anything they may need —
even comforting a
frightened 4-year-old until
her parents were located
at the other end of the
mall. It’s just part of the
job. And with Ada, it just
comes naturally. It’s no
wonder she has twice been
honored as a Customer
Service All-Star.
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Dear Customers, Shareholders and Employees,
The year 2001 represents a significant event in the history of Nordstrom. It was
100 years ago that my great-grandfather first opened the doors of a modest little
shoe store in Seattle. Reaching this milestone presents a fitting opportunity to
reflect upon the past and look toward the future. Everyone at Nordstrom is proud
of this company’s accomplishments over the last century, but we recognize that
our commitment to serving our customers must be renewed every day.
Our performance in 2000 did not meet our expectations, and chances are it
didn’t meet yours. In response, we have narrowed our focus to include the
following priorities:
• Achieving a balanced mix of merchandise, appropriately tailored by market,
to better serve our broad base of customers
• Utilizing information technology as a selling tool – in the form of a
perpetual inventory system – to help us offer not only the right merchandise,
but the right amount of merchandise, in every store
• Identifying efficiencies in back-of-the-house areas of our business to both
control costs and offer greater support to the selling floor
• Managing our growth – maintaining focus on our existing business while
capitalizing on favorable expansion opportunities
Some of these initiatives will have an impact on our business this year; some
will produce benefits realized over time. The bottom line: even in the face of
a changing economy, we are confident that by concentrating on doing what’s
right for our customers, we will also do what’s right for our shareholders.
We have many reasons to be optimistic — over 45,000 to be exact. After all,
our people continue to be our greatest asset. They are the ones who maintain
and build upon our reputation. They understand it is their business, their
customer, their legacy.
I am also enthusiastic about our executive team, which I am working with very
closely. Each of these individuals has experienced remarkable success as a leader
and mentor. They fully understand the importance of supporting those individuals
within the Company who are in direct contact with the customer, and giving them
the tools they need to be competitive and provide better service.
Our aim is not only to live up to, but to exceed, the extraordinary standards
that have been set, so that the next 100 years at Nordstrom will be no less
remarkable than the first. To achieve this, we will work to demonstrate, on
a daily basis, a level of service that will justify your ongoing goodwill and
support. Of course, we also welcome your input, which has always been key to
helping improve our business.
Sincerely,
Blake W. Nordstrom
President
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Management’s Discussion and Analysis
The following discussion and analysis reviews the past three
stores in Atlanta, Georgia; Hurst, Texas; Plano, Texas;
years and provides additional information on future
Glendale, California; Troy, Michigan; Honolulu, Hawaii;
expectations and trends. Some of the information in this
Spokane, Washington; Oak Brook, Illinois; Scottsdale,
annual report, including anticipated store openings and
Arizona; and Chandler, Arizona. As a result of the
planned capital expenditures, are forward-looking
acquisition of Façonnable, S.A. in October 2000, the
statements, which are subject to risks and uncertainties.
Company also operates 20 Façonnable boutiques located
Actual future results and trends may differ materially
primarily in Europe.
depending upon a variety of factors, including, but not
limited to, the Company’s ability to predict fashion trends
and consumer apparel buying patterns, the Company’s ability
to maintain and control proper inventory levels, the
Company’s ability to control costs and expenses, trends in
Results of Operations
Net Sales
The Company achieved a 7.4% increase in sales in 2000 as
compared to 1999 (the fiscal year ended January 31, 2000).
Certain components of the percentage change in sales by
personal bankruptcies and bad debt write-offs, employee
relations, adverse weather conditions and other hazards of
year are as follows:
nature such as earthquakes and floods, the Company’s ability
Fiscal Year
2000
1999
1998
to continue its expansion plans, and the impact of ongoing
Sales in comparable stores 0.3%
(1.1%)
(2.7%)
competitive market factors. This discussion and analysis
should be read in conjunction with the basic consolidated
Nordstrom.com
Total increase
32.2%
7.4%
9.2%
2.0%
35.5%
3.8%
financial statements and the Ten-Year Statistical Summary.
Overview
Comparable store sales (sales in stores open at least one full
fiscal year at the beginning of the fiscal year) were
During 2000 (the fiscal year ended January 31, 2001),
essentially flat in 2000, with increases in shoes, cosmetics
Nordstrom, Inc. and its subsidiaries (collectively, the
and accessories being offset primarily by decreases in
"Company") achieved increases in net sales compared to the
women’s apparel. The Company believes the decreases in
prior year, but also incurred higher costs in several expense
women’s apparel are primarily attributable to a change in the
categories. Other factors contributing to lower overall
merchandise mix in the women’s apparel areas, which did
profitability were non-recurring charges related to the write-
not result in sales increases as planned. In 1999,
off of an investment in an Internet grocery and consumer
comparable store sales decreased primarily due to missed
goods delivery company (approximately $33 million pre-tax),
fashion product offering opportunities in the women’s, kids’
the write-off of certain abandoned and impaired information
and juniors’ apparel divisions. The decrease in comparable
technology projects (approximately $10 million pre-tax) and
store sales in 1998 over 1997 was primarily attributable to
the incurrence of certain severance and other costs related to
the reduction of inventory levels, which resulted in lower, but
a change in management (approximately $13 million pre-
more profitable, sales.
tax).
During 2000, the Company opened 6 full-line stores in
Atlanta, Georgia; Frisco, Texas; Broomfield, Colorado;
Roseville, California; Chicago, Illinois; and Boca Raton,
Florida. The Company also opened 10 Nordstrom Rack
The Company has continued to expand its store base over the
past several years with store openings. New stores are
generally not as productive as older, more established stores,
because the customer base and traffic patterns of each new
location are developed over time.
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NOR DST ROM, INC. AND S UBSI DI ARIES
Nordstrom.com continued to contribute to the Company’s
The increase in 2000, as a percentage of net sales, includes
sales growth with revenues of $311 million, $235 million
third quarter charges of approximately $10 million (pre-tax)
and $215 million in 2000, 1999 and 1998, respectively.
related to the write-off of abandoned and impaired
The Company’s average price point has varied slightly over
information technology projects, and approximately $13
the past three years, due primarily to changes in the
million (pre-tax) of employee severance and other costs
merchandise mix. Inflation in overall merchandise costs and
related to a change in management. In addition, increased
prices has not been significant during the past three years.
costs in the areas of selling, credit, sales promotion, and
Gross Profit
Gross profit (net sales less cost of sales and related buying
and occupancy expenses) as a percentage of net sales
declined to 34.0% in 2000, as compared to 34.8% in 1999,
and 33.8% in 1998.
The decline in 2000 is attributable to lower than anticipated
sales, which also resulted in increased markdowns in order to
liquidate excess inventory. The 1999 improvement reflects
changes in the Company’s buying processes and vendor
programs, which was partially offset by increased occupancy
costs related to new stores and remodeling projects.
information services accounted for the majority of the
increase in the expense.
The 1999 increase, as a percentage of net sales, was
partially due to a charge of approximately $10 million
(pre-tax) primarily associated with the restructuring of the
Company’s information technology services area in order to
improve its efficiency and effectiveness. The Company also
experienced substantially increased operating expenses of
approximately $23 million, associated with the increased
sales activity of Nordstrom.com and Nordstromshoes.com.
These increases were partially offset by lower bad debt
expense due to the improved credit quality of the Company’s
Selling, General and Administrative
credit card receivables.
Selling, general and administrative expenses as a percentage
of net sales were 31.6% in 2000, 29.6% in 1999, and
28.3% in 1998.
PERCENTAGE OF 2000 SALES BY MERCHANDISE CATEGORY
4% Children’s Apparel and Accessories
3% Other
18% Men’s Apparel and Furnishings
35% Women’s Apparel
19% Shoes
21% Women’s Accessories
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Interest Expense, Net
expenses, partially offset by higher service charge income.
Interest expense, net increased 24.4% in 2000 primarily
Net earnings for 1999 were slightly lower than 1998 as the
due to higher average borrowings to finance capital
Company’s sales and gross margin improvements were offset
expenditures, the purchase of Façonnable, S.A. and the
by increases in selling, general and administrative expenses.
repurchase of shares. In 1999, interest expense, net
increased 7% as a result of higher average borrowings to
finance share repurchases. The Company repurchased 3.9
million and 10.2 million shares at an aggregate cost of
approximately $86 million and $303 million in 2000 and
1999, respectively.
Liquidity and Capital Resources
The Company finances its working capital needs, capital
expenditures, the purchase of Façonnable, and share
repurchase activity with cash provided by operations and
borrowings.
For the fiscal year ended January 31, 2001, net cash
Service Charge Income and Other, Net
provided by operating activities decreased approximately
Service charge income and other, net primarily represents
$198 million compared to the fiscal year ended January 31,
income from the Company’s credit card operations, offset by
2000, primarily due to lower net earnings and an increase in
miscellaneous expenses.
accounts receivable and merchandise inventories, partially
Service charge income and other, net increased in 2000 due
offset by an increase in accounts payable. The increase in
to higher service charge and late fee income associated with
accounts payable was primarily due to a change in the
increases in credit sales and the number of credit accounts,
Company’s policy to pay its vendors based on receipt of
and higher accounts receivable securitization gains. Service
goods rather than the invoice date. For the fiscal year ended
charge income and other, net was flat in 1999.
January 31, 2000, net cash provided by operating activities
Write-off of Investment
The Company held common shares in Streamline.com, Inc.,
an Internet grocery and consumer goods delivery company, at
a cost of approximately $33 million. Streamline ceased its
operations effective November 2000. During the year, the
Company wrote off the entire investment in Streamline.
Net Earnings
decreased approximately $223 million compared to the fiscal
year ended January 31, 1999, primarily due to the non-
recurring benefit of prior year reductions in inventories and
customer receivable account balances.
For the fiscal year ended January 31, 2001, net cash used
for investing activities increased approximately $119 million
compared to the fiscal year ended January 31, 2000,
primarily due to an increase in capital expenditures to fund
Net earnings for 2000 were lower than in 1999 due primarily
new stores and remodels. Additionally, approximately $84
to the write-off of the Streamline investment ($20 million
million of cash, net of cash acquired, was used to purchase
after-tax, $.15 per share), non-recurring charges related to
Façonnable, S.A. ("Façonnable"), of Nice, France, a designer,
the write-down of abandoned and impaired information and
wholesaler and retailer of high quality men’s and women’s
technology projects ($6 million after-tax, $.05 per share),
apparel and accessories. The purchase also provides for
and employee severance and other costs ($8 million after-
contingent payments to the principals that may be paid in
tax, $.06 per share). Net earnings, excluding non-recurring
fiscal 2006 based on the performance of the subsidiary and
charges would have been $136 million and $209 million in
the continued active involvement of the principals in
2000 and 1999, respectively. In addition, the Company
Façonnable. The contingent payments will be expensed
experienced higher selling, general and administrative
when it becomes probable that the performance targets will
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be met. Assuming Façonnable performed at 100% of the
the Company has made commitments for stores opening in
plan, the contingent payments would be approximately $20
2001 and beyond, it is possible that some stores may not be
million. For the fiscal year ended January 31, 2000, net
opened as scheduled because of delays inherent in the
cash used in investing activities decreased approximately
development process, or because of the termination of store
$68 million compared to the fiscal year ended January 31,
site negotiations.
1999, primarily due to an increase in funds provided by
In addition to its cash flow from operations, the Company
developers to defray part of the Company’s costs of
has $500 million available under its revolving credit facility.
constructing new stores.
Management believes that the Company’s current financial
The Company’s capital expenditures aggregated
strength and credit position enable it to maintain its existing
approximately $652 million over the last three years, net of
stores and to take advantage of attractive growth
developer reimbursements, principally to add new stores and
opportunities. The Company has senior unsecured debt
facilities and to improve existing stores and facilities. Over
ratings of Baa1 and A- and commercial paper ratings of P-2
3.4 million square feet of retail store space has been added
and A-2 from Moody’s and Standard and Poor’s, respectively.
during this time period, representing an increase of 27%
The Company owns a 49% interest in a limited partnership
since January 31, 1998.
which is constructing a new corporate office building in
The Company plans to spend approximately $1.2 billion, net
which the Company will be the primary occupant. In
of developer reimbursements, on capital projects during the
accordance with Emerging Issues Task Force Issue No.
next three years, including new stores, the remodeling of
97-10 "The Effect of Lessee Involvement in Asset
existing stores, new systems and technology, and other
Construction", the Company is considered to be the owner of
items. At January 31, 2001, approximately $428 million
the property. Construction in progress includes capitalized
has been contractually committed for the construction of new
costs related to this building of $57 million as of January
stores, buildings or the remodel of existing stores. Although
31, 2001. The Company is a guarantor of a $93 million
SQUARE FOOTAGE BY MARKET AREA AT JANUARY 31, 2001
1,568,000
9.8% Rack
126,000
0.8% Other
4,036,000
25.1% East Coast
4,878,000
30.4% Southwest
2,506,000
15.6% Central States
2,942,000
18.3% Northwest
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credit facility of the limited partnership of which $53 million
Recent Accounting Pronouncements
is outstanding as of January 31, 2001 and included in other
Statement of Financial Accounting Standards ("SFAS") No.
long-term debt.
133, "Accounting for Derivative Instruments and Hedging
The holders of the minority interest of Nordstrom.com, LLC,
Activities," as amended by SFAS No. 137 and 138, requires
through their ownership interests in its managing member
the Company to recognize all derivatives as either assets or
Nordstrom.com, Inc., have the right to sell their shares of
liabilities in the statement of financial position and to
Nordstrom.com, Inc. to the Company for the greater of the
measure those instruments at fair value. Adoption of this
fair value of the shares or $80 million in the event that
standard in the fiscal year beginning February 1, 2001, did
certain events do not occur. This put right will terminate
not have a material impact on the Company’s consolidated
without any further action by either party if the Company
financial statements.
provides at least $100 million in additional funding to
In September 2000, the FASB issued SFAS No. 140,
Nordstrom.com, Inc. prior to July 1, 2002 or if
"Accounting for Transfers and Servicing of Financial Assets
Nordstrom.com, Inc. completes an initial public offering of
and Extinguishments of Liabilities", a replacement of SFAS
its common stock prior to September 1, 2002. If, and when,
No. 125 with the same title. It revises the standards for
redemption of these securities becomes probable, the
securitizations and other transfers of financial assets and
Company would begin to accrete the difference between the
collateral and requires certain additional disclosures, but
fair value of the securities and its redemption amount over
otherwise retains most of SFAS No. 125’s provisions. SFAS
the period remaining prior to redemption.
No. 140 is effective for transfers after March 31, 2001, with
The Board of Directors has authorized an aggregate of $1.1
certain disclosures required for periods ending on or after
billion of share repurchases since May 1995. As of January
December 31, 2000. Adoption of this standard is not
31, 2001, the Company had repurchased approximately 39
expected to have a material impact on the Company’s
million shares of its common stock for approximately $1.0
consolidated financial statements.
billion pursuant to these authorizations, and had remaining
The Company adopted Emerging Issues Task Force Issue No.
share repurchase authority of approximately $100 million.
00-10 "Accounting for Shipping and Handling Fees and
Share repurchases have been financed, in part, through
Costs" ("EITF No. 00-10") in the fourth quarter of fiscal
additional borrowings, resulting in a planned increase in the
2000. EITF No. 00-10 addresses the income statement
Company’s debt to capital ratio. At January 31, 2001, the
classification for shipping and handling fees and costs.
Company’s debt to capital ratio was .49.
Adoption of this issue did not have a material impact on the
In October 2000, the Company issued $300 million of
Company’s consolidated financial statements for the fiscal
8.95% Senior Notes due in 2005. These proceeds were
year ended January 31, 2001.
used to reduce short-term indebtedness, to fund the
In May 2000, the Emerging Issues Task Force reached a
acquisition of Façonnable, and for general corporate
consensus on Issue No. 00-14 "Accounting for Certain Sales
purposes. A substantial portion of the Company’s total debt
Incentives" ("EITF No. 00-14"). This EITF addresses the
of $1.2 billion at January 31, 2001 finances the Company’s
recognition, measurement and
income statement
credit card portfolio, which aggregated $716 million at that
classification for certain sales incentives. The Company’s
date. In January 1999, the Company issued $250 million of
adoption of this EITF during the fourth quarter of fiscal
5.625% Senior Notes due in 2009, the proceeds of which
2000 did not have a material impact on the Company’s
were used to repay short-term debt and for general corporate
consolidated financial statements for the fiscal year ended
purposes.
January 31, 2001.
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Dollars in thousands except per share amounts
Consolidated Statements of Earnings
Year ended January 31,
% of
sales
2001
% of
sales
2000
% of
sales
1999
Net sales
$5,528,537
100.0
$5,149,266
100.0
$5,049,182
100.0
Costs and expenses:
Cost of sales and related
buying and occupancy
(3,649,516)
(66.0)
(3,359,760)
(65.2)
(3,344,945)
(66.2)
Gross profit
1,879,021
34.0
1,789,506
34.8
1,704,237
33.8
Selling, general and administrative
(1,747,048)
(31.6)
(1,523,836)
(29.6)
(1,429,837)
(28.3)
Operating income
Interest expense, net
Write-down of investment
Service charge income and other, net
Earnings before income taxes
131,973
(62,698)
(32,857)
130,600
167,018
2.4
(1.1)
(0.6)
2.3
3.0
265,670
5.2
274,400
5.5
(50,396)
(1.0)
(47,091)
(0.9)
—
116,783
332,057
—
2.2
6.4
—
—
110,414
337,723
2.1
6.7
Income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Cash dividends paid per share
(65,100)
(1.2)
(129,500)
(2.5)
(131,000)
(2.6)
$101,918
1.8
$202,557
3.9
$20 6,723
4.1
$0.78
$0.78
$0.35
$1.47
$1.46
$0.32
$1.41
$1.41
$0.30
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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Consolidated Balance Sheets
Dollars in thousands
January 31,
Assets
Current assets:
Cash and cash equivalents
Short-term investment
Accounts receivable, net
Merchandise inventories
Prepaid income taxes and other
Total current assets
Land, buildings and equipment, net
Available-for-sale investment
Goodwill
Trademarks and other intangible assets
Other assets
Total assets
Liabilities and Shareholders’ Equity
Current liabilities:
Notes payable
Accounts payable
Accrued salaries, wages and related benefits
Income taxes and other accruals
Current portion of long-term debt
Total current liabilities
Long-term debt
Deferred lease credits
Other liabilities
Shareholders’ equity:
Common stock, no par;
250,000,000 shares authorized;
133,797,757 and 132,279,988
shares issued and outstanding
Unearned stock compensation
Retained earnings
Accumulated other comprehensive earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity
2001
2000
$25,259
—
721,953
945,687
120,083
1,812,982
1,599,938
—
39,495
103,978
52,110
$3,608,5 03
$83,060
466,476
234,833
153,613
12,586
950,568
1,099,710
275,252
53,405
$27,042
25,527
616,989
797,845
97,245
1,564,648
1,429,492
35,251
—
—
32,690
$3,062,0 81
$70,934
390,688
211,308
135,388
58,191
866,509
746,791
194,995
68,172
330,394
(3,740)
900,090
2,824
1,229,568
247,559
(8,593)
929,616
17,032
1,185,614
$3,608,503
$3,062,081
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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Consolidated Statements of Shareholders’ Equity
Dollars in thousands except per share amounts
Common Stock
Shares
Amount
Unearned
Compensation
Retained
Earnings
Accum. Other
Comprehensive
Earnings
Total
Balance at February 1, 1998
152,518,104 $201,050
— $1,257,900
— $1,458,950
Net earnings
Cash dividends paid ($.30 per share)
Issuance of common stock
Stock compensation
Purchase and retirement
—
—
—
—
599,593
194,070
14,971
14,740
—
—
—
$(4,703)
206,723
(44,059)
—
—
—
—
—
—
206,723
(44,059)
14,971
10,037
of common stock
(11,197,600)
—
—
(346,077)
— (346,077)
Balance at January 31, 1999
142,114,167
230,761
(4,703)
1,074,487
Net earnings
Unrealized gain on investment
Comprehensive net earnings
Cash dividends paid ($.32 per share)
Issuance of common stock
Stock compensation
Purchase and retirement
—
—
—
—
—
—
—
—
341,947
40,274
9,577
7,221
—
—
—
—
—
(3,890)
202,557
—
—
(44,463)
—
—
— 1,300,545
—
202,557
$17,032
—
—
—
—
17,032
219,589
(44,463)
9,577
3,331
of common stock
(10,216,400)
—
—
(302,965)
— (302,965)
Balance at January 31, 2000
132,279,988
247,559
(8,593)
929,616
101,918
17,032
1,185,614
—
101,918
Net earnings
Other comprehensive earnings:
Unrealized loss on investment
during period, net of tax
Reclassification of realized loss, net of tax
Foreign currency translation adjustment
Comprehensive net earnings
Cash dividends paid ($.35 per share)
Issuance of common stock for:
Stock option plans
Employee stock purchase plan
Business acquisition
Stock compensation, net
Purchase and retirement
of common stock
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(45,935)
—
—
—
—
(23,461)
(23,461)
6,429
2,824
—
—
—
—
—
—
—
6,429
2,824
87,710
(45,935)
4,039
2,211
77,696
3,742
(85,509)
181,910
165,842
4,039
2,211
5,074,000
77,696
(14,075)
(1,111)
4,853
(3,889,908)
—
—
(85,509)
Balance at January 31, 2001
133,79 7,757 $330,39 4
$(3,74 0)
$900,0 9 0
$2,8 2 4 $1, 229,568
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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Consolidated Statements of Cash Flows
Dollars in thousands
Year ended January 31,
Operating Activities
Net earnings
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization of buildings and equipment
Amortization of goodwill
Amortization of trademark and other intangible assets
Amortization of deferred lease credits and other, net
Stock-based compensation expense
Write-down of investment
Change in operating assets and liabilities, net of effects from
acquisition of business
Accounts receivable, net
Merchandise inventories
Prepaid income taxes and other
Accounts payable
Accrued salaries, wages and related benefits
Income tax liabilities and other accruals
Other liabilities
2001
2000
1999
$101,918
$202,557
$206,723
203,048
429
822
(12,349)
7,594
32,857
(102,945)
(128,744)
(3,889)
67,561
16,736
3,879
(7,184)
193,718
—
—
(6,387)
3,331
—
(29,854)
(47,576)
(11,777)
51,053
14,942
965
7,154
180,655
—
—
(3,501)
10,037
—
77,313
75,776
15,357
18,324
17,156
(4,828)
8,296
Net cash provided by operating activities
179,733
378,126
601,308
Investing Activities
Capital expenditures
Additions to deferred lease credits
Payment for acquisition, net of cash acquired
Investments in unconsolidated affiliates
Other, net
(321,454)
92,361
(83,828)
—
(5,602)
(305,052)
114,910
—
—
(9,332)
(306,737)
74,264
—
(32,857)
(2,251)
Net cash used in investing activities
(318,523)
(199,474)
(267,581)
Financing Activities
Increase (decrease) in notes payable
Proceeds from issuance of long-term debt
Principal payments on long-term debt
Capital contribution to subsidiary from minority shareholders
Proceeds from issuance of common stock
Cash dividends paid
Purchase and retirement of common stock
Net cash provided by (used in) financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
12,126
308,266
(58,191)
—
6,250
(45,935)
(85,509)
137,007
(1,783)
27,042
(7,849)
—
(63,341)
16,000
9,577
(44,463)
(302,965)
(184,984)
544,165
(101,106)
—
14,971
(44,059)
(346,077)
(393,041)
(117,090)
(214,389)
241,431
216,637
24,794
Cash and cash equivalents at end of year
$25,259
$27,04 2
$241,4 31
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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Notes to Consolidated Financial Statements
Dollars in thousands except per share amounts
terminate without any further action by either party if the
Company provides at least $100,000 in additional funding
Note 1: Summary of Significant Accounting Policies
to Nordstrom.com, Inc. prior to July 1, 2002 or if
The Company: Nordstrom, Inc. is a fashion specialty retailer
offering a wide selection of high-quality apparel, shoes and
accessories for women, men and children, through 120
stores located in the United States, including 77 large
specialty stores, 38 clearance stores, 3 Façonnable
boutiques and 2 free-standing shoe stores. As a result of the
Nordstrom.com, Inc. completes an initial public offering of
its common stock prior to September 1, 2002. If, and when,
redemption of these securities becomes probable, the
Company would begin to accrete the difference between the
fair value of the securities and its redemption amount over
the period remaining prior to redemption.
acquisition of Façonnable, S.A. (“Façonnable”) in October
Basis of Presentation: The consolidated financial statements
2000 (Note 2), the Company also operates 20 Façonnable
include the accounts of Nordstrom, Inc. and its subsidiaries,
boutiques located primarily in Europe. Approximately 32%
the most significant of which are Nordstrom Credit, Inc.,
of the company’s retail square footage is located in the state
Nordstrom fsb (formerly known as Nordstrom National Credit
of California.
The Company purchases a significant percentage of its
merchandise from foreign countries, principally in the Far
East. An event causing a disruption in imports from the Far
East could have a material adverse impact on the Company’s
operations. In connection with the purchase of foreign
merchandise, the Company has outstanding letters of credit
totaling $62,051 at January 31, 2001.
On November 1, 1999, the Company established a
subsidiary to operate its Internet commerce and catalog
businesses, Nordstrom.com LLC. The Company contributed
certain assets and liabilities associated with its Internet
commerce and catalog businesses, and $10,000 in cash.
Venture funds associated with Benchmark Capital and
Madrona Investment Group collectively contributed $16,000
in cash to the new entity. At January 31, 2001, the
Company owns approximately 81.4% of Nordstrom.com LLC,
with Benchmark Capital and Madrona Investment Group
Bank) and Nordstrom.com LLC for the entire fiscal year. In
addition, the consolidated financial statements include the
operating results of Façonnable from the date of acquisition
(Note 2). All significant intercompany transactions and
balances are eliminated in consolidation. The presentation
of these financial statements in conformity with accounting
principles generally accepted in the United States of
America requires management to make estimates and
judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. Actual results could differ
from those estimates.
Revenue Recognition: The Company adopted Staff
Accounting Bulletin No. 101 “Revenue Recognition in
Financial Statements” in the fiscal year ended January 31,
2000. Revenues are recorded net of estimated returns and
exclude sales tax. Revenue is recorded at the point of sale
for retail stores. Catalog and e-commerce sales are recorded
upon delivery to the customer and include shipping revenue.
collectively holding the remaining minority interest. The
Buying and Occupancy Costs: Buying costs consist primarily
minority interest holders have the right to sell their shares of
of salaries and expenses incurred by the Company’s
Nordstrom.com LLC, through their ownership interests in its
merchandise managers, buyers and private label product
managing member Nordstrom.com, Inc., to the Company for
development group. Occupancy costs include rent,
the greater of the fair value of the shares or $80,000 in the
depreciation, property taxes and operating costs related to
event that certain events do not occur. This put right will
the Company’s retail and distribution facilities.
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Shipping and Handling Costs: The Company’s shipping and
practices, installments maturing in more than one year or
handling costs include payments to third-party shippers and
deferred payment accounts receivable are included in
costs incurred to store, move and prepare merchandise for
current assets.
shipment. The costs are included in selling, general and
administrative expenses.
Merchandise Inventories: Merchandise inventories are stated
at the lower of cost (first-in, first-out basis) or market, using
Advertising: Costs for newspaper, television, radio and other
the retail method.
media are generally expensed as incurred. Direct response
advertising costs, consisting primarily of catalog book
production and printing costs, are capitalized and amortized
over the expected life of the catalog, not to exceed six
months. Net capitalized direct response advertising costs
were $5,697 and $3,938 at January 31, 2001 and 2000,
and are included in prepaid income taxes and other on the
consolidated balance sheets. Total advertising expenses were
$190,991, $160,957 and $145,841 in 2000, 1999 and
1998.
Land, Buildings and Equipment: For buildings and
equipment acquired prior to February 1, 1999, depreciation
is computed using a combination of accelerated and straight-
line methods. The straight-line method was adopted for all
property placed into service after February 1, 1999 in order
to better reflect the utilization of the assets over time. The
effect of this change on net earnings for 1999 was not
material. Lives used for calculating depreciation and
amortization rates for the principal asset classifications are
as follows: buildings, 5 to 40 years; store fixtures and
Store Preopening Costs: Store opening and preopening costs
equipment, 3 to 15 years; leasehold improvements, life of
are charged to expense when incurred.
lease or applicable shorter period; software, 3 to 7 years.
Cash Equivalents: The Company considers all short-term
Capitalization of Interest: The interest-carrying costs of
investments with a maturity at date of purchase of three
capital assets under development or construction are
months or less to be cash equivalents.
capitalized based on the Company’s weighted average
Cash Management: The Company’s cash management system
borrowing rate.
provides for the reimbursement of all major bank
Intangible Assets: Goodwill, trademarks and other intangible
disbursement accounts on a daily basis. Accounts payable at
assets are being amortized over their estimated useful lives
January 31, 2000 includes $7,605 of checks not yet
on a straight-line basis ranging from 10 to 35 years.
presented for payment drawn in excess of cash balances.
Accumulated amortization of goodwill was $429 and of
Investments: Short-term and available-for-sale investments
consist of available-for-sale equity securities which are
trademarks and other intangible assets was $822 at January
31, 2001.
recorded at market value based on quoted market prices
Asset Impairment: The Company reviews its intangibles and
using the specific identification method. Unrealized gains
other long-lived assets annually to determine potential
and losses from changes in market value are reflected in
impairment. The Company estimates the undiscounted
accumulated other comprehensive earnings, net of related
future cash flows expected to result from the use of the asset
deferred taxes. Realized gains and losses and declines in
and its eventual disposition. If the sum of the expected
value of the investments judged to be other than temporary,
future cash flows is less than the carrying amount of the
are included in net earnings.
asset, an impairment charge would be recognized.
Customer Accounts Receivable: In accordance with industry
Deferred Lease Credits: Deferred lease credits are amortized
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on a straight-line basis primarily over the life of the
year ended January 31, 2001.
applicable lease.
In September 2000, the FASB issued SFAS No. 140
Fair Value of Financial Instruments: The carrying amount of
“Accounting for Transfers and Servicing of Financial Assets
cash equivalents and notes payable approximates fair value
and Extinguishments of Liabilities” (“SFAS No. 140”), a
because of the short maturity of these instruments. The fair
replacement of SFAS No. 125 with the same title. It revises
value of the Company’s investment in marketable equity
the standards for securitizations and other transfers of
securities is based upon the quoted market price and was
financial assets and collateral and requires certain additional
approximately $60,778 at January 31, 2000. The fair value
disclosures, but otherwise retains most of SFAS No. 125’s
of long-term debt (including current maturities), using
provisions. SFAS No. 140 is effective for transfers after
quoted market prices of the same or similar issues with the
March 31, 2001. Adoption of the accounting provisions of
same remaining term to maturity, is approximately
this standard will not have a material impact on the
$1,031,000 and $715,500 at January 31, 2001 and 2000.
Company’s consolidated financial statements. The Company
Derivatives Policy: The Company limits its use of derivative
financial instruments to the management of foreign currency
has complied with all SFAS No. 140 disclosure
requirements.
and interest rate risks. The effect of these activities is not
Reclassifications: Certain reclassifications of prior year and
material to the Company’s financial condition or results of
quarterly balances have been made for consistent
operations. The Company has no material off-balance sheet
presentation with the current year.
credit risk, and the fair value of derivative financial
instruments at January 31, 2001 and 2000 is not material.
Note 2: Acquisition
Statement of Financial Accounting Standards (“SFAS”) No.
133, “Accounting for Derivative Instruments and Hedging
Activities,” as amended by SFAS No. 137 and No. 138,
requires an entity to recognize all derivatives as either assets
or liabilities in the statement of financial position and to
measure those instruments at fair value. Adoption of this
standard, in the fiscal year beginning February 1, 2001, did
not have a material impact on the Company’s consolidated
financial statements.
On October 24, 2000, the Company acquired 100% of
Façonnable, S.A., of Nice, France, a designer, wholesaler
and retailer of high quality men’s and women’s apparel and
accessories. The Company paid $87,685 in cash and issued
5,074,000 shares of common stock of the Company for a
total consideration, including expenses, of $169,380. The
acquisition is being accounted for under the purchase
method of accounting, and, accordingly, Façonnable’s results
of operations have been included in the Company’s results of
operations since October 24, 2000. The purchase price has
Recent Accounting Pronouncements: In July 2000, the
been allocated to Façonnable’s assets and liabilities based
Company adopted Financial Accounting Standards Board
on their estimated fair values as of the date of acquisition.
Interpretation No. 44, “Accounting for Certain Transactions
Involving Stock Compensation” (“FIN No. 44”), which
provides guidance for certain issues that arose in applying
Accounting Principles Board Opinion No. 25, “Accounting
for Stock Issued to Employees” (“APB No. 25”). Adoption
of this Interpretation did not have a material impact on the
Company’s consolidated financial statements for the fiscal
The purchase also provides for contingent payments that may
be paid in fiscal 2006 based on the performance of the
subsidiary and the continued active involvement of the
principals in Façonnable, S.A. The contingent payments will
be recorded as compensation expense when it becomes
probable that the performance targets will be met.
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The following unaudited pro forma information presents the
Note 4: Interest Expense, Net
results of the Company’s operations assuming the
Façonnable acquisition occurred at the beginning of each
period presented:
The components of interest expense, net are as follows:
Year ended January 31,
2001
2000
1999
Short-term debt
$12,682
$2,584
$10,707
Year ended January 31,
2001
2000
Long-term debt
58,988
Net sales
Net earnings
$5,575,000 $5,205,000
Total interest expense
71,670
101,000
199,000
Less: Interest income
(1,330)
(3,521)
(1,883)
56,831
59,415
43,601
54,308
Basic earnings per share
Diluted earnings per share
0.75
$0.75
1.39
$1.39
Capitalized interest
(7,642)
(5,498)
(5,334)
Interest expense, net
$62,698
$50,396
$47,091
The pro forma financial information is not necessarily
Note 5: Income Taxes
indicative of the operating results that would have occurred
had the acquisition been consummated as of the beginning
of each period presented, nor is it necessarily indicative of
Income taxes consist of the following:
Year ended January 31,
2001
2000
1999
future operating results.
Current income taxes:
A summary of the Façonnable acquisition is as follows:
Federal
$79,778
$130,524
$113,270
State and local
11,591
21,835
19,672
Fair value of assets acquired
Intangible assets recorded
Liabilities assumed
Total consideration
Note 3: Employee Benefits
Total current
$48,677
144,724
(24,021)
$169,380
income taxes
91,369
152,359
132,942
Deferred income taxes:
Current
(11,215)
(18,367)
(1,357)
Non-current
(15,054)
(4,492)
(585)
Total deferred
income taxes
(26,269)
(22,859)
(1,942)
The Company provides a profit sharing plan for employees.
Total income taxes
$65,100
$129,500
$131,000
The plan is fully funded by the Company and is non-
contributory except for voluntary employee contributions
A reconciliation of the statutory Federal income tax rate to
made under Section 401(k) of the Internal Revenue Code.
the effective tax rate is as follows:
Under this provision of the plan, the Company provides
matching contributions up to a stipulated percentage of
employee contributions. Prior to 2000, the Company’s
contributions to the profit sharing portion of the plan vested
over a seven-year period. Effective January 1, 2000, the
Company’s subsequent contributions to the plan vest
immediately. The Company’s contribution is established
each year by the Board of Directors and totaled $31,330,
$47,500 and $50,000 in 2000, 1999 and 1998.
Year ended January 31,
2001
2000
1999
Statutory rate
35.00%
35.00%
35.00%
State and local
income taxes, net of
Federal income taxes
3.93
Other, net
.05
4.06
(.06)
4.03
(0.24)
Effective tax rate
38.98%
39.00%
38.79%
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Deferred income tax assets and liabilities result from
Diluted earnings per share is computed on the basis of the
temporary differences in the timing of recognition of revenue
weighted average number of common shares outstanding
and expenses for tax and financial reporting purposes.
during the year plus dilutive common stock equivalents
Significant deferred tax assets and liabilities, by nature of
(primarily stock options and restricted stock).
the temporary differences giving rise thereto, are as follows:
Options with an exercise price greater than the average
January 31,
2001
2000
market price were not included in the computation of diluted
Accrued expenses
Compensation and
benefits accruals
Merchandise inventories
Realized loss on investment
$28,658
$29,276
earnings per share. These options totaled 7,409,387
2,798,966 and 1,146,113 shares in 2000, 1999 and
43,803
26,290
12,751
35,651
1998.
24,461
Year ended January 31,
2001
2000
1999
—
Net earnings
$101,918
$202,557
$206,723
Other
23,098
15,595
Basic shares
131,012,412 137,814,589 146,241,091
Total deferred tax assets
134,600
104,983
Basic earnings per share $0.78
$1.47
$1.41
Land, buildings and
equipment basis and
Dilutive effect of
stock options and
depreciation differences
(25,678)
(22,982)
restricted stock
100,673
610,255
617,180
Employee benefits
(10,937)
(11,008)
Diluted shares
131,113,085 138,424,844 146,858,271
Unrealized gain on investment
—
(10,889)
Diluted earnings per share $0.78
$1.46
$1.41
Other
(3,748)
(3,025)
Total deferred tax liabilities
(40,363)
(47,904)
Note 7: Investment
Net deferred tax assets
$94,237
$57,079
As of January 31, 2001, the Company has $34,357 of
capital loss carryforwards available to be utilized within five
years to reduce future capital gain income. No valuation
allowance has been provided because management believes
it is more likely than not that the full benefit of the
carryforwards will be realized.
Note 6: Earnings Per Share
In September 1998, the Company purchased non-voting
convertible preferred stock in Streamline.com, Inc., an
Internet grocery and consumer goods delivery company, for
total consideration of $22,857. In June 1999, Streamline
completed an initial public offering of common stock. Upon
completion of the offering, the Company’s investment was
converted to common stock, which has been categorized as
available-for-sale. In January 2000, Streamline merged with
Beacon Home Direct, Inc., a privately-held company, in
which the Company had previously purchased preferred stock
In accordance with SFAS No. 128, “Earnings per Share,”
for total consideration of $10,000.
basic earnings per share is computed on the basis of the
weighted average number of common shares outstanding
during the year.
Streamline ceased its operations effective November 22,
2000, due to failure to obtain additional capital to fund its
operations. During 2000, the Company wrote off its entire
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investment in Streamline, for a total pre-tax loss on the
of the receivables sold, allocated based on their relative
investment of $32,857.
fair values. The fair values of the assets sold and
Retained Interest were based on the present value of
Note 8: Accounts Receivable
estimated future cash flows that the Company will receive
The components of accounts receivable are as follows:
over the estimated life of the securitization. The future cash
flows represent an estimate of the excess of finance charges
January 31,
Customers
Other
2001
2000
and fees over the interest paid to the holders of the Class A
$716,218
$611,858
22,266
20,969
and B certificates, credit losses and servicing fees. The
estimates of future cash flow are based on the current
Allowance for doubtful accounts
(16,531)
(15,838)
performance trends of the receivable portfolio, which
Accounts receivable, net
$721,953
$616,989
assumes a weighted-average life of 5 months for the
receivable balances, anticipated credit losses of 5.99% of
Credit risk with respect to accounts receivable is
new receivables, and a discount rate of 6.50%.
concentrated in the geographic regions in which the
Company operates stores. At January 31, 2001 and 2000,
approximately 41% and 38% of the Company’s receivables
were obligations of customers residing in California.
Concentration of the remaining receivables is considered to
be limited due to their geographical dispersion.
Proceeds from collections reinvested in previous credit card
securitizations totaled $485,422 in 2000. Gains on the
sale of receivables to the trust totaled $5,356 in 2000.
Additionally, Nordstrom fsb services the receivables in the
trust, and recorded servicing fees of $8,564 in 2000.
Interest income earned on the Class B certificate and other
Bad debt expense totaled $20,368, $11,707 and $23,828
cash flows received from the Retained Interest totaled
in 2000, 1999 and 1998.
Other accounts receivable consists primarily of vendor debit
$10,060 in 2000, and is included in service charge income
and other on the consolidated statements of earnings.
balances and cosmetic rebates receivable.
The Company also recognizes gains and losses on the fair
Nordstrom fsb, a wholly-owned subsidiary of the Company,
issues both a proprietary and VISA credit card. On an on-
going basis, the Company transfers substantially all of its
VISA receivables to a master trust. The Company holds a
Class B certificate, representing an undivided interest in the
trust, which is subordinate to a Class A certificate held by a
third party. The Company also owns the remaining undivided
interests in the trust not represented by the Class A and
Class B certificates (the “Retained Interest”). The
Company’s investment in the Class B certificate totals
$11,000 and $9,900 at January 31, 2001 and 2000, and is
included in customer accounts receivable.
The Company recognizes gains or losses on its securitization
of VISA receivables based on the historical carrying amount
value of the Retained Interest. The fair value of the
Retained Interest is $42,052 and $32,567 at January 31,
2001 and 2000, and is included in customer accounts
receivable. Assumptions used to measure future cash flows
are based on the current performance trends of the
receivable portfolio and include a weighted-average life of
the receivables of 5 months, anticipated credit losses of
5.99% of new receivables, and a discount rate of 6.50%. If
interest rates were to increase by 10% or credit losses were
to increase by 10%, the effect on the Retained Interest is a
decrease in fair value of approximately $339 or $371,
respectively. A 20% increase in interest rates or a 20%
increase in default rates would impact the Retained Interest
by decreasing the fair value by $678 or $743, respectively.
The total principal balance of the VISA receivables is
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$251,109 as of January 31, 2001. Credit losses and
At January 31, 2001, the net book value of property located
delinquencies of these receivables are $12,955 and $7,471
in California is approximately $308,000. The Company
for the year ended January 31, 2001.
carries earthquake insurance in California with a $50,000
The following table illustrates historical and future default
deductible.
projections using net credit losses as a percentage of
At January 31, 2001, the Company has contractual
average outstanding receivables in comparison to actual
commitments of approximately $428,000 for the
performance:
construction of new stores or remodeling of existing stores.
Year ended January 31,
2001
Original projection
Actual
5.99%
N/A%
2000
5.39%
5.46%
1999
Note 10: Notes Payable
6.94%
6.09%
A summary of notes payable is as follows:
Year ended January 31,
2001
2000
1999
Pursuant to the terms of operative documents of the trust, in
Average daily short-
certain events the Company may be required to fund certain
term borrowings
$192,392
$45,030
$195,596
amounts pursuant to a recourse obligation for credit losses.
Maximum amount
Based on current cash flow projections, the Company does
not believe any additional funding will be required.
Note 9: Land, Buildings and Equipment
Land, buildings and equipment consist of the following
outstanding
360,480
178,533
385,734
Weighted average
interest rate:
During the year
At year-end
6.6%
6.4%
5.8%
6.0%
5.5%
5.2%
(at cost):
January 31,
2001
2000
At January 31, 2001, the Company has an unsecured line of
credit with a group of commercial banks totaling $500,000
Land and land improvements
$60,871
$59,237
which is available as liquidity support for the Company’s
Buildings
760,029
650,414
commercial paper program, and expires in July 2002. The
Leasehold improvements
903,925
870,821
line of credit agreement contains restrictive covenants
Capitalized software
38,642
20,150
which, among other things, require the Company to maintain
Store fixtures and equipment
1,172,914 1,037,936
a certain minimum level of net worth and a coverage ratio (as
2,936,381 2,638,558
defined) of no less than 2 to 1. The Company pays a
Less accumulated depreciation
and amortization
(1,554,081) (1,370,726)
1,382,300 1,267,832
Construction in progress
217,638
161,660
Land, buildings and
equipment, net
$1,599,938 $1,429,492
commitment fee for the unused portion of the line based on
the Company’s debt rating.
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Note 11: Long-Term Debt
estimated to be July 2001. The Company is a guarantor of a
A summary of long-term debt is as follows:
$93,000 credit facility of the limited partnership. The
credit facility provides for interest at either the LIBOR rate
January 31,
2001
2000
plus .75%, or the greater of the Federal Funds rate plus .5%
Senior debentures, 6.95%,
and the prime rate, and matures in August 2002 (6.36% at
due 2028
$300,000
$300,000
January 31, 2001).
Senior notes, 5.625%,
due 2009
Senior notes, 8.950%,
250,000
250,000
Note 12: Leases
The Company leases land, buildings and equipment under
due 2005
300,000
—
noncancelable lease agreements with expiration dates
Medium-term notes, payable by
Nordstrom Credit, Inc.,
ranging from 2001 to 2080. Certain leases include renewal
provisions at the Company’s option. Most of the leases
7.25%-8.67%, due 2001-2002
87,750
145,350
provide for additional rent payments based upon specific
Notes payable, of
Nordstrom Credit, Inc.,
6.7%, due 2005
Other
Total long-term debt
Less current portion
100,000
100,000
74,546
9,632
1,112,296
804,982
(12,586)
(58,191)
percentages of sales and require the Company to pay for
certain common area maintenance and other costs.
Future minimum lease payments as of January 31, 2001 are
as follows: 2001-$59,434; 2002-$52,741; 2003-$51,305;
2004-$49,866; 2005-$47,396 and thereafter-$362,567.
Total due beyond one year
$1,099,710
$746,791
The following is a schedule of rent expense:
Aggregate principal payments on long-term debt are as
follows: 2001-$12,586; 2002-$131,150; 2003-$1,157;
Minimum rent:
Year ended January 31,
2001
2000
1999
2004-$1,224; 2005-$400,208 and thereafter-$565,971.
Store locations
$16,907
$18,794
$19,167
The Company owns a 49% interest in a limited partnership
which is constructing a new corporate office building in
which the Company will be the primary occupant. In
accordance with Emerging Issues Task Force Issue No. 97-
10 “The Effect of Lessee Involvement in Asset
Construction”, the Company is considered to be the owner of
the property. Construction in progress includes capitalized
Offices, warehouses
and equipment
21,070
19,926
19,208
Percentage rent:
Store locations
9,241
7,441
8,603
Total rent expense
$47,218
$46,161
$46,978
Note 13: Stock-Based Compensation
costs related to this building of $57,270, which includes
Stock Option Plan
noncash amounts of $41,883, as of January 31, 2001. The
corresponding finance obligation of $53,060 as of January
31, 2001 is included in other long-term debt. This finance
obligation will be amortized as rental payments are made by
the Company to the limited partnership over the life of
permanent financing, expected to be 20-25 years. The
amortization will begin once construction is complete,
The Company has a stock option plan (the “Plan”)
administered by the Compensation Committee of the Board
of Directors (the “Committee”) under which stock options,
performance share units and restricted stock may be granted
to key employees of the Company. Stock options are issued
at the fair market value of the stock at the date of grant.
Options vest over periods ranging from four to eight years,
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and expire ten years after the date of grant.
In May 2000, the Company’s shareholders approved an
In addition to option grants, the Committee granted
355,072, 272,970 and 185,201 performance share units in
2000, 1999 and 1998, which will vest over three years if
certain financial goals are attained. Employees may elect to
8,000,000 share increase in the number of shares of the
Company’s common stock authorized for issuance under its
option plan. At January 31, 2001, 10,150,579 shares are
reserved for future stock option grants pursuant to the Plan.
receive common stock or cash upon vesting of these
The Company applies APB No. 25 and FIN No. 44 in
performance shares. The Committee also granted 30,069
measuring compensation costs under its stock-based
and 180,000 shares of restricted stock in 1999 and 1998,
compensation programs. Accordingly, no compensation cost
with weighted average fair values of $32.09 and $27.75,
has been recognized for stock options issued under the Plan.
respectively, which vest over five years. No monetary
For performance share units, compensation expense is
consideration is paid by employees who receive performance
recorded over the performance period at the fair market
share units or restricted stock. At January 31, 2001,
value of the stock at the date when it is probable that such
$2,741 was recorded in accrued salaries, wages and related
shares will be earned. For restricted stock, compensation
benefits for these performance shares. In September 2000,
expense is based on the market price on the date of grant
the Company accelerated the vesting of 144,000 shares of
and is recorded over the vesting period. Stock-based
restricted stock resulting in compensation expense of
compensation expense for 2000, 1999 and 1998 was
$3,039, and also cancelled 14,175 shares of restricted
$7,594, $3,331 and $10,037, respectively.
stock as a result of management changes.
Stock option activity for the Plan was as follows:
Year ended January 31,
2001
Weighted-
Average
Exercise
Price
2000
Weighted-
Average
Exercise
Price
Shares
Shares
Outstanding, beginning of year
8,135,301
$28
5,893,632
Granted
Exercised
Cancelled
Outstanding, end of year
2,470,169
(181,910)
(1,550,218)
8,873,342
Options exercisable at end of year 3,833,379
21
20
28
$27
$26
2,926,368
(341,947)
(342,752)
8,135,301
3,145,393
$27
31
23
30
$28
$25
1999
Weighted-
Average
Exercise
Price
$21
31
18
27
$27
$23
Shares
3,401,602
3,252,217
(599,593)
(160,594)
5,893,632
2,544,092
The following table summarizes information about stock options outstanding for the Plan as of January 31, 2001:
Options Outstanding Options Exercisable
Weighted-
Average Weighted-
Average
Exercise
Price
Remaining
Contractual
Life (Years)
7
7
8
7
$20
27
36
$27
Weighted-
Average
Exercise
Price
$20
28
35
$26
Shares
1,446,456
1,590,360
796,563
3,833,379
Range of
Exercise Prices
Shares
$13 - $22
3,659,001
$23 - $32
2,855,785
$33 - $40
2,358,556
8,873,342
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NOR D STROM, I NC. AND SUBSI DIA RI ES
Nordstrom.com
Nordstrom.com has two stock option plans, the “1999 Plan”
and the “2000 Plan”. As of January 31, 2001 and 2000,
under the 1999 and 2000 Plans, 1,767,565 and
2,590,000 options were outstanding at weighted-average
exercise prices of $1.76 and $1.70 per share; of which
300,654 and 775,500 are exercisable at the weighted-
in 2000 and 1999, respectively: risk-free interest rates of
6.5% and 6.1%; expected volatility factors of .64 and .61;
expected dividend yield of 0% for all years; and expected
lives of 5 years for all years. The weighted-average fair value
of options granted for Nordstrom.com was $1.04 and $.96
for the years ended January 31, 2001 and 2000,
respectively.
average exercise price of $1.67 per share. Options were
If SFAS No. 123 were used to account for the Company’s
granted at exercise prices ranging from $1.67 to $1.92 per
stock-based compensation programs, the pro forma net
share. Pursuant to APB No. 25 and FIN No. 44, no
earnings and earnings per share would be as follows:
compensation cost has been recognized related to the
options under these Plans because the exercise price was
Year ended January 31,
2001
2000
1999
equal to, or in excess of the fair value of Nordstrom.com
Pro forma net earnings $89,433
$192,936 $201,499
stock on the date of grant as determined by the Board of
Pro forma basic
Directors of Nordstrom.com. The options vest over a period
earnings per share
$0.68
$1.40
$1.38
of two and one-half to four years and must be exercised
Pro forma diluted
within ten years of the grant date.
earnings per share
$0.68
$1.39
$1.37
Employee Stock Purchase Plan
In May 2000, the Company’s shareholders approved the
establishment of an Employee Stock Purchase Plan (the
“ESPP”) under which 3,500,000 shares of the Company’s
common stock are reserved for issuance to employees.
The plan qualifies as a noncompensatory employee stock
purchase plan under Section 423 of the Internal Revenue
Code. Employees are eligible to participate through
payroll deductions in amounts related to their base
compensation. At the end of each offering period, shares
are purchased by the participants at 85% of the lower
of the fair market value at the beginning or the end of the
offering period, usually six months. Under the ESPP,
165,842 shares were issued in 2000. As of January 31,
2001, payroll deductions totaling $2,602 were accrued for
purchase of shares on March 31, 2001.
SFAS No. 123
If the Company had elected to follow the measurement
provisions of SFAS No. 123 in accounting for its stock-based
compensation programs, compensation expense would be
recognized based on the fair value of the options or the
shares at the date of grant. To estimate compensation
expense which would be recognized under SFAS No. 123,
the Company used the modified Black-Scholes option-pricing
model with the following weighted-average assumptions for
options granted in 2000, 1999 and 1998, respectively: risk-
free interest rates of 6.4%, 5.7% and 5.2%; expected
volatility factors of .65, .61 and .46; expected dividend yield
of 1% for all years; and expected lives of 5 years for all
years. As for its ESPP, the Company used the following
weighted-average assumptions for shares purchased by its
employees in 2000: risk-free interest rate of 6.02%;
expected volatility factor of .65; expected dividend yield of
1% and expected life of 0.5 years. The weighted-average
fair value of options granted was $12, $17 and $14 for the
years ended January 31, 2001, 2000 and 1999,
respectively. For Nordstrom.com, the Company used the
following weighted-average assumptions for options granted
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NORD ST RO M, INC . AND SUBSIDIA RI ES
Note 14: Supplementary Cash Flow Information
the design and production of private label merchandise
Supplementary cash flow information includes the following:
Year ended January 31,
2001
2000
1999
Cash paid during
the year for:
Interest (net of
sold in the majority of the Company’s retail stores. Credit
Operations segment revenues consist primarily of finance
charges earned through issuance of the Nordstrom
proprietary and VISA credit cards. The Catalog/Internet
segment generates revenues from direct mail catalogs and
the Nordstrom.com and Nordstromshoes.com Web sites.
capitalized interest) $58,190
$54,195
$44,418
The Company’s senior management utilizes various
Income taxes
88,911
129,566
126,157
measurements to assess segment performance and to
Note 15: Segment Reporting
The Company has three reportable segments which have
allocate resources to segments. The measurements used to
compute net earnings for reportable segments are consistent
with those used to compute net earnings for the Company.
been identified based on differences in products and
The accounting policies of the operating segments are the
services offered and regulatory conditions: the Retail Stores,
same as those described in the summary of significant
Credit Operations, and Catalog/Internet segments. The
accounting policies in Note 1. Corporate and Other includes
Retail Stores segment derives its sales from high-quality
certain expenses and a portion of interest expense which are
apparel, shoes and accessories for women, men and
not allocated to the operating segments. Intersegment
children, sold through retail store locations. It includes the
revenues primarily consist of fees for credit card services
Company’s Product Development Group which coordinates
and are based on fees charged by third party cards.
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NOR D STROM, I NC. AND SUBSID IAR IE S
The following tables set forth the information for the Company’s reportable segments and a reconciliation to the
consolidated totals:
Year ended January 31, 2001
Net sales and revenues to
Retail
Stores
Credit
Operations
Catalog/
Internet
Corporate
and Other
Eliminations
Total
external customers (b)
$5,217,889
—
$310,648
Depreciation and amortization
176,831
Service charge income
Intersegment revenues
Interest expense, net
Amortization of goodwill and
other intangible assets
Income tax expense (benefit)
Net earnings (loss)
Assets (a)(b)
Goodwill and
—
$135,121
30,294
795
1,251
165,150
258,416
26,889
29,267
1,786
—
13,140
20,557
2,554,393
703,077
—
—
(604)
7,552
—
—
(29,367)
71,233
—
—
—
$33,240
16,879
—
(113,190)
(147,688)
279,800
other intangible assets
Capital expenditures
143,473
286,941
—
3,095
—
5,187
—
26,231
— $5,528,537
—
135,121
$(57,183)
—
—
—
—
—
—
62,698
203,048
1,251
65,100
101,918
— 3,608,503
—
—
143,473
321,454
Year ended January 31, 2000
Net sales and revenues to
Retail
Stores
Credit
Operations
Catalog/
Internet
Corporate
and Other
Eliminations
Total
external customers
$4,914,293
—
$234,973
Service charge income
Intersegment revenues
Interest expense, net
Depreciation and amortization
Income tax expense (benefit)
Net earnings (loss)
Assets (a)
Capital expenditures
—
$125,727
20,285
728
170,765
191,790
300,009
2,051,327
263,352
25,963
26,933
1,424
19,450
30,417
601,320
2,792
—
—
(167)
6,313
—
(35,685)
95,241
5,206
—
—
—
$22,902
15,216
(81,740)
(92,184)
314,193
33,702
— $5,149,266
—
125,727
$(46,248)
—
—
—
—
—
50,396
193,718
129,500
202,557
— 3,062,081
—
305,052
Year ended January 31, 1999
Net sales and revenues to
Retail
Stores
Credit
Operations
Catalog/
Internet
Corporate
and Other
Eliminations
Total
external customers
$4,834,049
—
$215,133
Service charge income
Intersegment revenues
Interest expense, net
Depreciation and amortization
Income tax expense (benefit)
Net earnings (loss)
Assets (a)
Capital expenditures
—
$123,201
23,748
—
166,099
182,800
288,503
2,040,938
273,906
26,736
31,139
806
16,200
25,606
607,255
2,191
—
—
—
4,613
—
(17,681)
57,803
4,121
—
—
—
$16,488
9,137
(68,000)
(89,705)
397,693
26,519
— $5,049,182
—
123,201
$(50,484)
(536)
—
—
—
47,091
180,655
131,000
—
206,723
— 3,103,689
306,737
—
(a) Segment assets in Corporate and Other include unallocated assets in corporate headquarters, consisting primarily of land, buildings and equipment,
and deferred tax assets.
(b) Includes sales of foreign operations of $12,318 from October 24, 2000, the date of acquisition, and assets of $206,601 as of January 31, 2001.
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NOR DST ROM, INC. AND S UBSI DI ARIES
Note 16: Contingent Liabilities
specialty stores will sell such cosmetics at the
The Company has been named in various lawsuits and
manufacturer’s suggested retail price ("MSRP"); controlling
intends to vigorously defend itself in those cases. The
the advertising of cosmetics and Gift-With-Purchase
Company is not in a position at this time to quantify the
programs; and the manufacturer defendants guaranteeing the
amount or range of any possible losses related to those
retailer defendants a gross margin equal to 40% of MSRP
claims. While no assurance can be given as to the ultimate
and buying back any unsold cosmetics to prevent
outcome of these lawsuits, based on preliminary
discounting from MSRP.
investigations, management currently believes that resolving
Plaintiffs seek treble damages and restitution in an
these matters will not have a material adverse effect on the
unspecified amount, attorneys’ fees and prejudgment
Company’s financial position, results of operations or cash
interest, on behalf of a class of all California residents who
flows.
purchased cosmetics and fragrances for personal use from
Cosmetics. The Company was originally named as a
any of the defendants during the period four years prior to
defendant along with other department store and specialty
the filing of the amended complaint. Defendants, including
retailers in nine separate but virtually identical class action
the Company, have answered the amended complaint
lawsuits filed in various Superior Courts of the State of
denying the allegations. Plaintiffs have submitted requests
California in May, June and July 1998 that have now been
for production of documents to the manufacturer defendants,
consolidated in Marin County state court. Plaintiffs’
who are in the process of responding to these and plaintiffs’
consolidated complaint alleged that the Company and other
other discovery requests. Plaintiffs have not yet moved for
retailers agreed to charge identical prices for cosmetics and
class certification.
fragrances, not to discount such prices, and to ur ge
Nine West.
In early 1999, the Company was named as a
manufacturers to refuse to sell to retailers who sell
defendant in a number of substantially identical lawsuits
cosmetics and fragrances at discount prices, resulting in
that were consolidated in Federal District Court in New York.
artificially-inflated retail prices paid by the class in violation
In addition to Nine West, a leading manufacturer and retailer
of California state law. Defendants, including the Company,
of men’s, women’s and children’s non-athletic footwear and
answered the consolidated complaint denying the
accessories, which was later acquired by Jones Apparel,
allegations. The Company and the other retail defendants
other defendants included various department store and
have produced documents and responded to plaintiffs’ other
specialty retailers. Plaintiffs filed a consolidated complaint
discovery requests, including providing witnesses for
alleging that the retailer defendants agreed with Nine West
depositions.
and with each other on the minimum prices to be charged
Last year, plaintiffs filed an amended complaint naming a
for Nine West shoes. Plaintiffs sought treble damages in an
number of manufacturers of cosmetics and fragrances and
unspecified amount, attorneys’ fees and prejudgment
two other retailers as additional defendants. Plaintiffs’
interest on behalf of a nationwide class of persons who
amended complaint alleges that the retail price of the
purchased Nine West footwear from the defendants during
"prestige" cosmetics sold in department and specialty stores
the period January 1988 to February 1999.
was collusively controlled by the retailer and manufacturer
The Federal Trade Commission and the Attorneys General of
defendants in violation of the Cartwright Act and the
the states of New York, Ohio, Texas and Florida then opened
California Unfair Competition Act by various means,
an investigation into the plaintiffs’ allegations, and the
including restricting the sale of prestige cosmetics to
Company and the other defendants submitted documents
department stores only; agreeing that all department and
and information to those agencies. Last year, Nine
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NOR D STROM, I NC. AND SUBSID IAR IE S
West/Jones Apparel, and the Federal Trade Commission and
1997. Plaintiff, a resident of Pennsylvania and a user of
the states, separately reached tentative agreements on
Nordstrom's credit through Nordstrom fsb, claims to
settlements and consent decrees under which all fifty states
represent all customers of Nordstrom who have been
and certain possessions of the United States exercised their
extended credit by Nordstrom fsb under revolving credit
right under federal law and filed suit against Nine West, but
accounts for consumer purchases at Nordstrom stores.
not the Company, in Federal District Court in New York on
Plaintiff claims that Nordstrom fsb has been paid principal,
behalf of a class of persons who purchased Nine West
interest and late fees in violation of said statutes on account
footwear during the period January 1, 1988 through July 31,
of which plaintiff seeks recovery or forfeiture thereof.
1999, alleging violations of federal and state antitrust and
Nordstrom fsb has moved to dismiss the complaint and a
related laws. Pursuant to the settlement agreements, Nine
hearing on that motion was held on February 21, 2001.
West paid $34 million in damages to the states and
The court has not yet ruled on that motion. Counsel to
submitted to certain injunctive relief.
Nordstrom fsb has advised the Company that in their
In December 2000, the Federal District Court in New York
opinion, plaintiff’s claim is meritless.
gave final approval to the settlement agreement between
Bar Code. The Company is named as one of 135 retailer
Nine West and the states, and the Federal Trade Commission
defendants in a lawsuit filed in the United States District
approved its settlement and consent decree with Nine West.
Court for the District of Arizona. Plaintiff claims that the
As a result, the court entered a final judgment dismissing
Company and the other defendants have infringed certain
the suit filed by the fifty states and certain possessions of
patents held by it related to methods of scanning production
the United States against Nine West. The period for appeal
markings (bar codes) placed on work pieces or merchandise.
from the court’s decision approving the settlement with the
The complaint seeks from each defendant an award of
states has expired and that settlement and judgment have
damages for past infringement, to be trebled because of
become final. Neither settlement admitted any violation of
alleged willful and deliberate infringement. In February
the law or liability by Nine West, the Company or any other
2001, the Company was dismissed without prejudice
defendant in the putative private class actions. Nor did the
pursuant to an agreement and stipulation intended to resolve
settlements require any payment by the Company.
a potential judicial conflict of interest. The agreement
The plaintiffs who filed the putative private class actions
confirms that if the potential conflict is for any reason
against Nine West, the Company and other retailers agreed
resolved, plaintiff can amend its complaint to add the
that the suit instituted by the states against Nine West took
Company as a defendant.
precedence over those actions, which were never certified as
Saipan. The Company has reached a settlement, which is of
class actions, and that the final judgment dismissing the
an immaterial amount, in its previously described lawsuits
states’ proceeding also conclusively and preclusively resolved
relating to its sourcing of clothing products from
all claims alleged in plaintiffs’ consolidated complaint
independent garment manufacturers
in Saipan
against the Company and the other defendants, which have
(Commonwealth of Northern Marina Islands). The settlement
likewise been dismissed.
is subject to court approval. No hearing has been set to
Credit Fees. The Company’s subsidiary, Nordstrom fsb, has
date.
been named a defendant in a purported class action in the
Other. The Company is also subject to other ordinary routine
Federal District Court for the Eastern District of
litigation incidental to its business and with respect to which
Pennsylvania. The case purports to be brought under the
no material liability is expected.
National Bank Act and the Arizona Consumer Loan Act of
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NOR DST ROM, INC. AND S UBSI DI ARIES
Note 17: Selected Quarterly Data (unaudited)
Year ended January 31, 2001
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
Net sales
Gross profit
Write-down of investment
Earnings before income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Dividends per share
$1,153,377
$1,457,035
$1,262,390
$1,655,735
$5,528,537
407,722
502,722
438,522
530,055
1,879,021
—
(10,540)
(20,655)
(1,662)
(32,857)
53,689
32,789
.25
.25
.08
74,501
45,401
.35
.35
.09
(5,520)
(3,320)
(.03)
(.03)
.09
44,348
27,048
167,018
101,918
.20
.20
.09
.78
.78
.35
Year ended January 31, 2000
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
Net sales
Gross profit
Earnings before income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Dividends per share
$1,043,981
$1,449,089
$1,116,219
$1,539,977
$5,149,266
355,785
51,688
31,538
.22
.22
.08
505,741
116,189
70,839
.51
.51
.08
398,375
529,605
1,789,506
55,033
33,633
109,147
66,547
332,057
202,557
.25
.25
.08
.50
.50
.08
1.47
1.46
.32
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Ten-Year Statistical Summary
Dollars in thousands except square footage and per share amounts
Year ended January 31,
Financial Position
Customer accounts receivable, net
Merchandise inventories
Current assets
Current liabilities
Working capital
Working capital ratio
Land, buildings and equipment, net
Long-term debt, including current portion
Debt/capital ratio
Shareholders’ equity
Shares outstanding
Book value per share
Total assets
Operations
Net sales
Gross profit
2001
2000
1999
$ 699,687
$ 596,020
$ 567,661
945,687
797,845
750,269
1,812,982
1,564,648
1,668,689
950,568
862,414
1.91
866,509
698,139
1.81
794,490
874,199
2.10
1,599,938
1,429,492
1,378,006
1,112,296
804,982
.4929
.4249
868,234
.4214
1,229,568
1,185,614
1,300,545
133,797,757 132,279,988
142,114,167
9.19
8.96
9.15
3,608,503
3,062,081
3,103,689
5,528,537
5,149,266
1,879,021
1,789,506
5,049,182
1,704,237
Selling, general and administrative expense
(1,747,048)
(1,523,836)
(1,429,837)
Operating income
Interest expense, net
Write-down of investment
Service charge income and other, net
Earnings before income taxes
Income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Dividends per share
Comparable store sales percentage increase (decrease)
Net earnings as a percent of net sales
Return on average shareholders’ equity
Sales per square foot for Company-operated stores
Stores
Total square footage
131,973
(62,698)
(32,857)
130,600
167,018
265,670
(50,396)
—
116,783
332,057
274,400
(47,091)
—
110,414
337,723
(65,100)
(129,500)
(131,000)
101,918
202,557
206,723
.78
.78
.35
.3%
1.84%
8.44%
342
140
1.47
1.46
.32
(1.1%)
3.93%
16.29%
350
104
1.41
1.41
.30
(2.7%)
4.09%
14.98%
362
97
16,056,0 00
14,487,0 00
13,593,0 00
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1998
1997
1996
1995
1994
1993
1992
$ 641,862
$ 693,123
$ 874,103
$ 655,715
$ 565,151
$ 584,379
$ 585,490
826,045
719,919
626,303
627,930
585,602
536,739
506,632
1,613,492
1,549,819
1,612,776
1,397,713
1,314,914
1,219,844
1,177,638
979,031
634,461
1.65
795,321
754,498
1.95
833,443
779,333
1.94
1,252,513
1,152,454
1,103,298
420,865
.3194
380,632
.2720
439,943
.3232
693,015
704,698
2.02
984,195
373,910
.2575
631,064
683,850
2.08
845,596
438,574
.2934
516,397
703,447
2.36
824,142
481,945
.3337
1,458,950
1,457,084
1,408,053
1,330,437
1,153,594
1,038,649
558,768
618,870
2.11
856,404
491,076
.4029
927,465
152,518,104
159,269,954
162,226,288
164,488,196
164,118,256
163,949,594
163,688,454
9.57
9.15
8.68
8.09
7.03
6.34
5.67
2,890,664
2,726,495
2,732,619
2,396,783
2,177,481
2,053,170
2,041,875
4,864,604
1,568,791
4,457,931
4,113,717
1,378,472
1,310,931
3,895,642
1,297,018
3,591,228
1,121,539
3,415,613
3,174,822
1,079,608
1,007,554
(1,338,235)
(1,232,860)
(1,136,069)
(1,029,856)
(940,708)
(901,446)
(831,005)
230,556
(34,250)
—
110,907
307,213
(121,000)
186,213
1.20
1.20
.265
4.0%
3.83%
12.77%
384
92
145,612
(39,400)
—
135,331
241,543
(95,227)
146,316
.90
.90
.25
0.6%
3.28%
10.21%
377
83
174,862
(39,295)
—
134,179
269,746
(106,190)
163,556
1.00
1.00
.25
(0.7%)
3.98%
11.94%
382
78
267,162
(30,664)
—
98,311
334,809
(132,304)
202,505
1.23
1.23
.1925
4.4%
5.20%
16.30%
395
76
180,831
(37,646)
—
88,509
231,694
(90,804)
140,890
.86
.86
.17
2.7%
3.92%
12.85%
383
74
178,162
(44,810)
—
86,140
219,492
(84,489)
135,003
.82
.82
.16
1.4%
3.95%
13.73%
381
72
176,549
(49,106)
—
87,443
214,886
(80,527)
134,359
.82
.82
.155
1.4%
4.23%
15.41%
388
68
12,614,0 0 0
11,754,0 0 0
10,713,0 0 0
9,998,0 0 0
9,282,0 0 0
9,224,0 0 0
8,590,0 0 0
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NOR D STROM, I NC. AND SUBSID IAR IE S
Management and Independent Auditors’ Report
Management Report
Independent Auditors’ Report
The accompanying consolidated financial statements,
We have audited the accompanying consolidated balance
including the notes thereto, and the other financial
sheets of Nordstrom, Inc. and subsidiaries (the "Company")
information presented in this Annual Report have been
as of January 31, 2001 and 2000, and the related
prepared by management. The financial statements have
consolidated statements of earnings, shareholders’ equity and
been prepared in accordance with accounting principles
cash flows for each of the three years in the period ended
generally accepted in the United States of America and
January 31, 2001. These financial statements are the
include amounts that are based upon our best estimates and
responsibility of the Company’s management. Our
judgments. Management is responsible for the consolidated
responsibility is to express an opinion on these financial
financial statements, as well as the other financial
statements based on our audits.
information in this Annual Report.
We conducted our audits in accordance with auditing
The Company maintains an effective system of internal
standards generally accepted in the United States of
accounting control. We believe that this system provides
America. Those standards require that we plan and perform
reasonable assurance that transactions are executed in
the audit to obtain reasonable assurance about whether the
accordance with management authorization, and that they are
financial statements are free of material misstatement. An
appropriately recorded, in order to permit preparation of
audit includes examining, on a test basis, evidence
financial statements in conformity with accounting principles
supporting the amounts and disclosures in the financial
generally accepted in the United States of America and to
statements. An audit also includes assessing the accounting
adequately safeguard, verify and maintain accountability for
principles used and significant estimates made by
assets. The concept of reasonable assurance is based on the
management, as well as evaluating the overall financial
recognition that the cost of a system of internal control
statement presentation. We believe that our audits provide a
should not exceed the benefits derived.
reasonable basis for our opinion.
The consolidated financial statements and related notes have
In our opinion, the accompanying consolidated financial
been audited by Deloitte & Touche LLP, independent certified
statements present fairly, in all material respects, the
public accountants. The accompanying independent
financial position of Nordstrom, Inc. and subsidiaries as of
auditors’ report expresses an independent professional
January 31, 2001 and 2000, and the results of their
opinion on the fairness of presentation of management’s
operations and their cash flows for each of the three years in
financial statements.
The Audit Committee of the Board of Directors is composed
of the outside directors, and is responsible for recommending
the independent certified public accounting firm to be
retained for the coming year, subject to shareholder approval.
the period ended January 31, 2001, in conformity with
accounting principles generally accepted in the United States
of America.
The Audit Committee meets periodically with the
Seattle, Washington
independent auditors, as well as with management and the
March 21, 2001
internal auditors, to review accounting, auditing, internal
accounting controls and financial reporting matters. The
independent auditors and the internal auditors also meet
privately with the Audit Committee.
Michael G. Koppel
Vice President and Corporate Controller
(Principal Accounting Officer)
40
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NOR DST ROM, INC. AND S UBSI DI ARIES
Officers of the Corporation
Jammie Baugh, 48
Executive Vice President,
Human Resources
Laurie M. Black, 42
Vice President,
Kevin T. Knight, 45
Suzanne R. Patneaude, 54
Executive Vice President and President,
Vice President,
Nordstrom Credit and Customer
Corporate Merchandise Manager,
Relationship Marketing
Michael G. Koppel, 44
Designer/Savvy,
Full-line Store Group
Corporate Merchandise Manager,
Vice President, Corporate Controller and
R. Michael Richardson, 44
Women’s Activewear/Lingerie/Hosiery,
Acting Chief Financial Officer
Vice President,
Full-line Store Group
Mark S. Brashear, 39
Executive Vice President,
Southwest General Manager,
Full-line Store Group
Robert E. Campbell, 45
Vice President,
Strategy and Planning,
Treasurer
N. Claire Chapman, 40
Corporate Secretary and
Director of Legal Affairs
Gail A. Cottle, 49
Executive Vice President
and President,
Llynn (Len) A. Kuntz, 40
Executive Vice President,
Northwest General Manager,
Full-line Store Group
David P. Lindsey, 51
Vice President, Store Planning
David L. Mackie, 52
Vice President, Real Estate
Robert J. Middlemas, 44
Executive Vice President,
Central States General Manager,
Full-line Store Group
Jack H. Minuk, 46
Vice President,
Nordstrom Product Group
Corporate Merchandise Manager,
Dale Cameron (Crichton), 52
Executive Vice President,
Women’s Shoes,
Full-line Store Group
Corporate Merchandise Manager,
Blake W. Nordstrom, 40
President
Bruce A. Nordstrom, 67
Chairman of the Board of Directors
Erik B. Nordstrom, 37
Executive Vice President,
Full-line Stores,
Full-line Store Group
Cosmetics,
Full-line Store Group
Joseph V. Demarte, 49
Vice President,
Human Resources
Linda Toschi Finn, 53
Executive Vice President,
Marketing
Bonnie M. Junell, 44
Vice President,
Corporate Merchandise Manager,
Point of View/Narrative,
Full-line Store Group
Chief Information Officer
Karen Bowman Roesler, 45
Vice President,
Marketing
Nordstrom Credit Group
(Karen) K. C. Shaffer, 47
Executive Vice President,
General Merchandise Manager,
Nordstrom Rack Group
Joel T. Stinson, 51
Executive Vice President,
Chief Administrative Officer
Delena M. Sunday, 40
Executive Vice President,
Diversity Affairs
Susan A. Wilson Tabor, 55
Executive Vice President
and President,
Nordstrom Rack Group
Michael A. Tam, 44
Executive Vice President,
Director of Brands,
Nordstrom Product Group
Geevy S. K. Thomas, 36
Executive Vice President,
General Merchandise Manager,
Peter E. Nordstrom, 39
Full-line Store Group
Executive Vice President and President,
Full-line Store Group
James R. O’Neal, 42
Executive Vice President,
East Coast General Manager,
Full-line Store Group
41
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NOR D STROM, I NC. AND SUBSID IAR IE S
Directors and Committees
Directors
D. Wayne Gittinger, 68
Partner, Lane Powell Spears Lubersky LLP
Seattle, Washington
Enrique Hernandez, Jr., 45
President and CEO,
Inter-Con Security Systems, Inc.
Pasadena, California
Ann McLaughlin Korologos, 59
Chairman, the Aspen Institute
Aspen, Colorado
John A. McMillan, 69
Retired Co-Chairman of the Board of Directors
Seattle, Washington
Bruce A. Nordstrom, 67
Chairman of the Board of Directors
Seattle, Washington
John N. Nordstrom, 64
Retired Co-Chairman of the Board of Directors
Seattle, Washington
Alfred E. Osborne, Jr., 56
Director of the Harold Price Center
for Entrepreneurial Studies and
Associate Professor of Business Economics,
The Anderson School at UCLA
Los Angeles, California
William D. Ruckelshaus, 68
A Principal in Madrona Investment
Group, L.L.C.
Seattle, Washington
Bruce G. Willison, 52
Dean, The Anderson School at UCLA
Los Angeles, California
42
Committees
Executive
John A. McMillan
Bruce A. Nordstrom
John N. Nordstrom
Audit
Enrique Hernandez, Jr.
Ann McLaughlin Korologos, Chair
Alfred E. Osborne, Jr.
William D. Ruckelshaus
Bruce G. Willison
Compensation and Stock Option
Enrique Hernandez, Jr.
Ann McLaughlin Korologos
Alfred E. Osborne, Jr.
William D. Ruckelshaus, Chair
Finance
D. Wayne Gittinger
Enrique Hernandez, Jr.
John A. McMillan
John N. Nordstrom
Alfred E. Osborne, Jr., Chair
Bruce G. Willison
Corporate Governance and Nominating
D. Wayne Gittinger, Chair
Enrique Hernandez, Jr.
Ann McLaughlin Korologos
Alfred E. Osborne, Jr.
William D. Ruckelshaus
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Location
Store Name
area/sq. ft.
Location
Store Name
Present
total store
Fashion Square
235,000
NOR DST ROM, INC. AND S UBSI DI ARIES
Retail store facilities
151,000
195,000
154,000
122,000
116,000
235,000
156,000
147,000
150,000
172,000
134,000
187,000
173,000
161,000
164,000
149,000
190,000
220,000
151,000
130,000
174,000
149,000
169,000
186,000
165,000
193,000
East Coast Group (continued)
Maryland
Annapolis
Bethesda
Columbia
Towson
New Jersey
Edison
Freehold
Paramus
Short Hills
New York
Garden City
White Plains
Pennsylvania
Annapolis Mall
Montgomery Mall
The Mall in Columbia
Towson Town Center
Menlo Park
Freehold Raceway Mall
Garden State Plaza
The Mall at Short Hills
Roosevelt Field
The Westchester
Rhode Island
Providence
Virginia
Arlington
McLean
Norfolk
Central States Group
Illinois
Chicago
Oak Brook
Schaumburg
Skokie
Indiana
The Fashion Centre
at Pentagon City
Tysons Corner Center
MacArthur Center
Michigan Avenue
Oakbrook Center
Woodfield Shopping Center
Old Orchard Center
Indianapolis
Circle Centre
Kansas
Overland Park
Oak Park Mall
King of Prussia
The Plaza at King of Prussia
238,000
Providence Place
206,000
Present
total store
area/sq. ft.
162,000
225,000
173,000
205,000
266,000
174,000
282,000
188,000
241,000
219,000
241,000
253,000
166,000
271,000
249,000
215,000
209,000
216,000
219,000
Southwest Group
Arizona
Scottsdale
California
Arcadia
Brea
Santa Anita
Brea Mall
Canoga Park
Topanga Plaza
Cerritos
Los Cerritos Center
Corte Madera
The Village at Corte Madera
Costa Mesa
Escondido
Glendale
Los Angeles
Mission Viejo
Montclair
Palo Alto
Pleasanton
South Coast Plaza
North County Fair
Glendale Galleria
Westside Pavilion
The Shops at Mission Viejo
Montclair Plaza
Stanford Shopping Center
Stoneridge Mall
Redondo Beach
The Galleria at South Bay
Riverside
Roseville
The Galleria at Tyler
Galleria at Roseville
Sacramento
Arden Fair
San Diego
San Diego
San Diego
San Francisco
San Francisco
San Mateo
Santa Ana
Fashion Valley Center
Horton Plaza
University Towne Centre
Stonestown Galleria
Hillsdale Shopping Center
MainPlace/Santa Ana
Santa Barbara
Paseo Nuevo
Santa Clara
Walnut Creek
Valley Fair
Broadway Plaza
East Coast Group
Connecticut
Farmington
Florida
Boca Raton
Georgia
Atlanta
Buford
San Francisco Shopping Centre
350,000
Westfarms
189,000
Michigan
Troy
Town Center at Boca Raton
193,000
Minnesota
Somerset Collection
258,000
Perimeter Mall
Mall of Georgia
243,000
172,000
Ohio
Beachwood
Beachwood Place
231,000
Bloomington
Mall of America
240,000
Texas
Dallas
Frisco
Dallas Galleria
Stonebriar Centre
249,000
149,000
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Retail store facilities, cont.
Location
Store Name
area/sq. ft.
Location
Store Name
Northwest Group
Nordstrom Rack Group
Present
total store
Alaska
Anchorage
Colorado
Broomfield
Littleton
Oregon
Portland
Portland
Portland
Salem
Tigard
Utah
Murray
Anchorage
FlatIron Crossing
Park Meadows
Clackamas Town Center
Downtown Portland
Lloyd Center
Salem Center
Washington Square
Fashion Place
Salt Lake City
Crossroads Plaza
Washington
Bellevue
Lynnwood
Seattle
Seattle
Spokane
Tacoma
Tukwila
Vancouver
Yakima
Other
Honolulu, HI
Honolulu, HI
Façonnable
Façonnable
Bellevue Square
Alderwood Mall
Downtown Seattle (1)
Northgate
Spokane
Tacoma Mall
Southcenter Mall
Vancouver Mall
Downtown Yakima
Women’s Ala Moana Shoes
Men’s Ala Moana Shoes
U.S. (3 boutiques)
International (20 boutiques)
97,000
172,000
245,000
121,000
174,000
150,000
71,000
189,000
110,000
140,000
285,000
127,000
383,000
122,000
137,000
134,000
170,000
71,000
44,000
14,000
8,000
35,000
69,000
Present
total store
area/sq. ft.
37,000
48,000
38,000
45,000
30,000
31,000
50,000
36,000
54,000
57,000
48,000
44,000
64,000
34,000
44,000
34,000
40,000
Chandler, AZ
Phoenix, AZ
Chandler Festival Rack
Last Chance
Scottsdale, AZ
Scottsdale Promenade Rack
Brea, CA
Chino, CA
Colma, CA
Brea Union Plaza Rack
Chino Rack
Colma Rack
Costa Mesa, CA
Metro Pointe Rack
Glendale, CA
Glendale Fashion Center Rack
Sacramento, CA
Howe ‘Bout Arden Center Rack
San Diego, CA
San Jose, CA
Mission Valley Rack
Westgate Mall Rack
San Leandro, CA
San Leandro Rack
Woodland Hills, CA
Topanga Rack
Littleton, CO
Buford, GA
Honolulu, HI
Northbrook, IL
Oak Brook, IL
Meadows Marketplace Rack
Mall of Georgia Rack
Victoria Ward Center Rack
Northbrook Rack
The Shops at Oakbrook Place Rack 42,000
Schaumburg, IL
Woodfield Rack
Gaithersburg, MD
Gaithersburg Rack
Silver Spring, MD
City Place Rack
Towson, MD
Troy, MI
Towson Rack
Troy Marketplace Rack
Bloomington, MN
Mall of America Rack
45,000
49,000
37,000
31,000
40,000
41,000
Hampstead, NY
The Mall at the Source Rack
48,000
Beaverton, OR
Tanasbourne Town Center Rack
Portland, OR
Portland, OR
Clackamas Promenade Rack
Downtown Portland Rack
Philadelphia, PA
Franklin Mills Mall Rack
Plano, TX
Hurst, TX
Preston Shepard Place Rack
North East Mall Rack
Salt Lake City, UT
Sugarhouse Rack
Woodbridge, VA
Potomac Mills Rack
Auburn, WA
Bellevue, WA
Auburn SuperMall Rack
Factoria Rack
Lynnwood, WA
Golde Creek Plaza Rack
Seattle, WA
Spokane, WA
Downtown Seattle Rack
NorthTown Mall Rack
53,000
28,000
19,000
43,000
39,000
40,000
31,000
46,000
48,000
46,000
38,000
42,000
28,000
(1) Excludes approximately 311,000 square feet of corporate
and administrative offices.
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Shareholder Information
Independent Auditors
Deloitte & Touche LLP
Counsel
Lane Powell Spears Lubersky LLP
Transfer Agent and Registrar
Mellon Investor Services LLC
P.O. Box 3315
South Hackensack, New Jersey 07606
Telephone (800) 318-7045
TDD for Hearing Impaired
(800) 231-5469
Foreign Shareholders
(201) 329-8660
TDD Foreign Shareholders
(201) 329-8354
General Offices
1617 Sixth Avenue
Seattle, Washington 98101-1742
Telephone (206) 628-2111
Annual Meeting
May 15, 2001 at 11:00 a.m.
Pacific Daylight Time
Nordstrom Downtown Seattle Store
John W. Nordstrom Room, fifth floor
1617 Sixth Avenue
Seattle, Washington 98101-1742
Form 10-K
The Company’s Annual Report on
Form 10-K for the year
ended January 31, 2001 will be
provided to shareholders
upon written request to:
Nordstrom, Inc. Investor Relations
P.O. Box 2737
Seattle, Washington 98111
or by calling (206) 373-4310.
Shareholder Information
Please visit www.nordstrom.com
to obtain shareholder information.
In addition, the Company is always
willing to discuss matters of concern
to shareholders, including its vendor
standards compliance mechanisms and
progress in achieving compliance.
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