Item 1. Business. - ------------------
Nordstrom, Inc. (the "Company") was incorporated in the State of Washington in 1946 as successor to a retail shoe business started in 1901. As of January 31, 1997, the Company operates 62 large specialty stores in Alaska, California, Colorado, Illinois, Indiana, Maryland, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Texas, Utah, Virginia, and Washington, selling a wide selection of apparel, shoes and accessories for women, men and children.
The Company also operates nineteen stores under the name "Nordstrom Rack" and one clearance store which serve as outlets for clearance merchandise from the Company's large specialty stores. The Racks also purchase merchandise directly from manufacturers. The Racks are located in California, Illinois, Maryland, Oregon, Pennsylvania, Utah, Virginia, and Washington.
The Company also operates a men's specialty boutique in New York under the name "Faconnable", and leased shoe departments in twelve department stores in Hawaii and Guam. The licenses for the leased shoe departments have been terminated effective November 17, 1997. In addition, the Company operates a Direct Sales Division which commenced operations in January 1994 with the mailing of its first catalog.
In August 1997, the Company will open a large specialty store in Long Island, New York and two more large specialty stores in West Hartford, Connecticut and Cleveland, Ohio in September 1997. In February 1997, the Company opened two new Rack stores in Southern California, which replaced existing Rack locations. The Company will open two new Racks in Bellevue, Washington, in May 1997 and in Hempstead, New York, in September 1997. The Company also plans to open a men's and women's Faconnable boutique in Beverly Hills, California in September to complete its planned new store opening schedule for 1997. In 1998, three new large specialty stores are planned to open in Atlanta, Georgia, Overland Park, Kansas, and Scottsdale, Arizona. In 1998, the Company also plans to open a new flagship store in downtown Seattle, Washington, and to remodel a store in San Diego, California.
The Company regularly employs on a full or part-time basis an average of approximately 39,600 employees. Due to the seasonal nature of the Company's business, the number increased to approximately 46,000 employees in July for the Company's anniversary sale, and in December for the Christmas selling season.
The Company's business is highly competitive. Its stores compete with other national, regional and local retail establishments within its operating areas which carry similar lines of merchandise, including department stores, specialty stores, boutiques and mail order businesses. The Company believes the principal methods of competing in its industry include customer service, value, fashion, advertising, store location and depth of selection.
Certain other information required under Item 1 is contained within the following sections of the Company's 1996 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report: Message to Our Shareholders Management Discussion and Analysis Note 1 in Notes to Consolidated Financial Statements Note 12 in Notes to Consolidated Financial Statements Retail Store Facilities
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Executive Officers of the Registrant - ------------------------------------
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Item 2.
Item 2. Properties. - --------------------
The Company also operates seven merchandise distribution centers, five of which are owned and two of which are leased. The Company leases its principal offices in Seattle, Washington, and owns an office building in the Denver, Colorado metropolitan area which serves as the principal offices of Nordstrom Credit, Inc. and Nordstrom National Credit Bank.
Certain other information required under this item is included in the following sections of the Company's 1996 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report:
Note 6 in Notes to Consolidated Financial Statements Retail Store Facilities
Item 3.
Item 3. Legal Proceedings. - ---------------------------
The Company is not involved in any material pending legal proceedings, other than routine litigation in the ordinary course of business.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders. - ------------------------------------------------------------- None
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PART II Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. - ----------------------------------------------------------------------
The Company's Common Stock, without par value, is traded on the NASDAQ National Market under the symbol "NOBE." The approximate number of holders of Common Stock as of March 17, 1997 was 74,000.
Certain other information required under this item with respect to stock prices and dividends is included in the following sections of the Company's 1996 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report:
Financial Highlights Stock Trading Consolidated Statements of Shareholders' Equity Note 8 in Notes to Consolidated Financial Statements Note 13 in Notes to Consolidated Financial Statements
Item 6.
Item 6. Selected Financial Data. - ---------------------------------
The information required under this item is included in the following section of the Company's 1996 Annual Report to Shareholders, which section is incorporated by reference herein from Exhibit 13.1 of this report:
Ten-Year Statistical Summary
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. - ------------------------------------------------------------------------
The information required under this item is included in the following section of the Company's 1996 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report:
Management Discussion and Analysis Note 5 in Notes to Consolidated Financial Statements
Item 8.
Item 8. Financial Statements and Supplementary Data. - -----------------------------------------------------
The information required under this item is included in the following sections of the Company's 1996 Annual Report to Shareholders, which sections are incorporated by reference herein from Exhibit 13.1 of this report:
Consolidated Statements of Earnings Consolidated Balance Sheets Consolidated Statements of Shareholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Independent Auditors' Report
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. - ------------------------------------------------------------------------ None
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PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant. - ------------------------------------------------------------
The information required under this item with respect to the Company's Directors and compliance with Section 16(a) of the Exchange Act is included in the following sections of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders, which sections are incorporated by reference herein and will be filed within 120 days after the end of the Company's fiscal year:
Election of Directors Compliance with Section 16(a) of the Exchange Act of 1934
The information required under this item with respect to the Company's Executive Officers is incorporated by reference from Part I, Item 1 of this report under "Executive Officers of the Registrant".
Item 11.
Item 11. Executive Compensation. - --------------------------------
The information required under this item is included in the following sections of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders, which sections are incorporated by reference herein and will be filed within 120 days after the end of the Company's fiscal year:
Compensation of Executive Officers in the Year Ended January 31, 1997 Compensation and Stock Option Committee Report on Fiscal Year 1996 Executive Compensation Stock Price Performance Compensation of Directors Compensation Committee Interlocks and Insider Participation
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management. - ------------------------------------------------------------------------
The information required under this item is included in the following section of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders, which section is incorporated by reference herein and will be filed within 120 days after the end of the Company's fiscal year:
Security Ownership of Certain Beneficial Owners and Management
Item 13.
Item 13. Certain Relationships and Related Transactions. - --------------------------------------------------------
The information required under this item is included in the following sections of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders, which sections are incorporated by reference herein and will be filed within 120 days after the end of the Company's fiscal year:
Election of Directors Compensation Committee Interlocks and Insider Participation
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PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. - -------------------------------------------------------------------------- (a)1. Financial Statements --------------------
The following consolidated financial information and statements of Nordstrom, Inc. and its subsidiaries and the Independent Auditors' Report are incorporated by reference herein from Exhibit 13.1 of this report:
Consolidated Statements of Earnings Consolidated Balance Sheets Consolidated Statements of Shareholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Independent Auditors' Report
(a)2. Financial Statement Schedules -----------------------------
Page ---- Independent Auditors' Consent and Report on Schedule 13 II - Valuation and Qualifying Accounts 14
Other schedules for which provision is made in Regulation S-X are not required, are inapplicable, or the information is included in the Company's 1996 Annual Report to Shareholders as incorporated by reference herein from Exhibit 13.1 of this report.
(a)3. Exhibits --------
(3.1) Articles of Incorporation of the Registrant are hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1989, Exhibit A.
(3.2) By-laws of the Registrant, as amended, are filed herein as an Exhibit.
(4.1) The Indenture between Nordstrom Credit, Inc. (a wholly-owned subsidiary of the Registrant) and Norwest Bank Colorado, N.A., as successor trustee, dated November 15, 1984, the First Supplement thereto dated January 15, 1988, the Second Supplement thereto dated June 1, 1989 and the Third Supplement thereto dated October 19, 1990 are hereby incorporated by reference from Registration No. 33-3765, Exhibit 4.2; Registration No. 33-19743, Exhibit 4.2; Registration No. 33-29193, Exhibit 4.3; and the Nordstrom Credit, Inc. Annual Report on Form 10-K (SEC File No. 0-12994) for the year ended January 31, 1991, Exhibit 4.2, respectively.
Securities authorized under each of any other long-term debt instruments of the Company or its subsidiaries do not exceed 10% of the consolidated total assets of the Company and its subsidiaries. The Company will furnish a copy of any such long- term debt instrument or agreement to the Commission upon request.
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(a)3. Exhibits (continued) --------------------
(4.2) Trustee Resignation of Wells Fargo Bank (Colorado), N.A., (as successor to First Interstate Bank of Denver, N.A.), dated March 20, 1997 is filed herein as an Exhibit.
(4.3) Trustee Acceptance of Norwest Bank Colorado, N.A., dated March 20, 1997 is filed herein as an Exhibit.
(10.1) Operating Agreement dated August 30, 1991 between Nordstrom Credit, Inc. and Nordstrom National Credit Bank is hereby incorporated by reference from the Nordstrom Credit, Inc. Quarterly Report on Form 10-Q (SEC File No. 0-12994) for the quarter ended July 31, 1991, Exhibit 10.1, as amended.
(10.2) Merchant Agreement dated August 30, 1991 between Registrant and Nordstrom National Credit Bank is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 31, 1991, Exhibit 10.1.
(10.3) The 1987 Nordstrom Stock Option Plan is hereby incorporated by reference from the Registrant's Proxy Statement for the 1987 Annual Meeting of Shareholders.
(10.4) The Nordstrom Supplemental Retirement Plan is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1993, Exhibit 10.3.
(10.5) The 1993 Non-Employee Director Stock Incentive Plan is hereby incorporated by reference from the Registrant's Form 10-K for the year ended January 31, 1994, Exhibit 10.4.
(10.6) Investment Agreement dated October 8, 1984 between the Registrant and Nordstrom Credit, Inc. is hereby incorporated by reference from the Nordstrom Credit, Inc. Form 10, Exhibit 10.1.
(10.7) Operating Agreement for VISA Accounts and Receivables dated May 1, 1994 between Nordstrom Credit, Inc. and Nordstrom National Credit Bank is hereby incorporated by reference from Registration No. 33-55905, Exhibit 10.1.
(10.8) Agreement to terminate the Operating Agreement for VISA Accounts and Receivables dated May 1, 1994 between Nordstrom Credit, Inc. and Nordstrom National Credit Bank, dated August 14, 1996 is hereby incorporated by reference from the Nordstrom Credit, Inc. Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.1.
(10.9) Master Pooling and Servicing Agreement dated August 14, 1996 between Nordstrom National Credit Bank and Norwest Bank Colorado, N.A., as trustee, is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.1.
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(a)3. Exhibits (continued) --------------------
(10.10) Series 1996-A Supplement to Master Pooling and Servicing Agreement dated August 14, 1996 between Nordstrom National Credit Bank, Nordstrom Credit, Inc. and Norwest Bank Colorado, N.A., as trustee, is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.2.
(10.11) Transfer and Administration Agreement dated August 14, 1996 between Nordstrom National Credit Bank, Enterprise Funding Corporation and Nationsbank, N.A. is hereby incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 1996, Exhibit 10.3.
(10.12) Receivables Purchase Agreement dated August 14, 1996 between Registrant and Nordstrom Credit, Inc. is filed herein as an Exhibit.
(10.13) The Nordstrom, Inc. 1997 Stock Option Plan is hereby incorporated by reference from the Registrant's Proxy Statement for the 1997 Annual Meeting of Shareholders.
(13.1) The Company's 1996 Annual Report to Shareholders is filed herein as an Exhibit.
(21.1) List of the Registrant's Subsidiaries is filed herein as an Exhibit.
(23.1) Independent Auditors' Consent and Report on Schedule is on page 13 of this report.
(27.1) Financial Data Schedule is filed herein as an Exhibit.
All other exhibits are omitted because they are not applicable, not required, or because the required information is included in the Company's 1996 Annual Report to Shareholders.
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(b) Reports on Form 8-K -------------------
No reports on Form 8-K were filed during the last quarter of the period for which this report is filed.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NORDSTROM, INC. (Registrant)
Date March 31, 1997 by /s/ John A. Goesling -------------- ------------------------------------------ John A. Goesling Executive Vice President and Treasurer (Principal Accounting and Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
Principal Accounting and Principal Executive Officer: Financial Officer:
/s/ John A. Goesling /s/ John J. Whitacre - ------------------------------- -------------------------------- John A. Goesling John J. Whitacre Executive Vice President Chairman and Director and Treasurer
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Directors:
/s/ Philip M. Condit /s/ Bruce A. Nordstrom - ------------------------------- -------------------------------- Philip M. Condit Bruce A. Nordstrom Director Director
/s/ D. Wayne Gittinger /s/ John N. Nordstrom - ------------------------------- -------------------------------- D. Wayne Gittinger John N. Nordstrom Director Director
/s/ Raymond A. Johnson /s/ Alfred E. Osborne, Jr. - ------------------------------- -------------------------------- Raymond A. Johnson Alfred E. Osborne, Jr. Director Director
/s/ Charles A. Lynch /s/ William D. Ruckelshaus - ------------------------------- -------------------------------- Charles A. Lynch William D. Ruckelshaus Director Director
/s/ Ann D. McLaughlin /s/ Elizabeth Crownhart Vaughan - ------------------------------- -------------------------------- Ann D. McLaughlin Elizabeth Crownhart Vaughan Director Director
/s/ John A. McMillan /s/ John J. Whitacre - ------------------------------- --------------------------------- John A. McMillan John J. Whitacre Director Chairman of the Board of Directors
Date March 31, 1997 ___________________________
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Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
Shareholders and Board of Directors Nordstrom, Inc.
We consent to the incorporation by reference in Registration Statements Nos. 33-18321 and 33-28882 of Nordstrom, Inc. on Form S-8 of our reports dated March 10, 1997 appearing in and incorporated by reference in this Annual Report on Form 10-K of Nordstrom, Inc. and subsidiaries for the year ended January 31, 1997.
We have audited the consolidated financial statements of Nordstrom, Inc. and subsidiaries as of January 31, 1997 and 1996, and for each of the three years in the period ended January 31, 1997, and have issued our report thereon dated March 10, 1997; such financial statements and report are included in your 1996 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Nordstrom, Inc. and subsidiaries, listed in Item 14(a)2. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
Deloitte & Touche LLP March 31, 1997 Seattle, Washington
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NORDSTROM, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
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NORDSTROM INC. AND SUBSIDIARIES