Nordstrom is expanding its operations in Canada and the United States through new full-line stores and Nordstrom Racks. The company saw a 12% increase in total sales in 2013 from opening 22 new Nordstrom Racks. Nordstrom aims to have 167 Rack stores by the end of 2014 and 230 by the end of 2016. The company is also focusing on technology to enhance the customer experience through mobile checkout and apps that allow customers to receive personalized recommendations and alerts.

1. Dear Customers, Employees, and Shareholders:
At Nordstrom we strive to serve our customers in an exceptional way. The
customers are who guide us to continue to make improvements at Nordstrom, not
only with face-to-face interactions but also in new ways. Our goal is simple: to serve
our customers better, to always be relevant in their lives, and to form lifelong
relationships.
NEW FULL-LINE STORES
There have been many changes going on in our Nordstrom stores that we are happy
to say have improved our sales within this past year. As many of you may know,
Nordstrom is currently expanding to Canada and the new Calgary store opened on
September 19, 2014. Calgary Nordstrom is the
first one to open in Canada but we will be
opening many more in Ottawa, Vancouver, and
three in Toronto. We’re excited about our store
expansion and look forward to serving more
customers in Canada.
Not only are we expanding to Canada but we
also opened our second full-line store in
Houston on September 5, 2014, as well as a new
store in Jacksonville, Florida that opened on
October 10, 2014. We have also evolved our in-store experience with new store
designs in selected stores. This year, we will be remodeling our flagship store in
downtown Seattle, which will be a two-year remodel. Within the next few years we
will also be opening new stores in Milwaukee, Puerto Rico, and Minneapolis, in
addition to our first full-line store in Manhattan in 2018.
NORDSTROM RACK
Nordstrom Rack is a key contributor to our growth strategy and results. Rack
customers love the treasure hunt experience and the opportunity to find significant
savings on the same great brands we carry at our full-line stores. Ten years ago, we
had only 48 Rack stores. We plan to have 167 by the end of 2014, and 230 by the
end of 2016. Our customers have been responding with great enthusiasm to our
newest Rack stores across the country.
ONLINE, OFF-PRICE
HauteLook allows us to take advantage of the growing online, off-price marketplace
and helps us develop our e-commerce capabilities. As of 2013, we have 16 million

2. members, up 300 percent since we acquired HauteLook in 2011. To enhance
customer convenience, they can now return any HauteLook items to any Rack store.
We recently launched nordstromrack.com along with a Rack mobile app.
OUR NEWEST TECHNOLOGY
We want to make our customer experience easy and convenient. With our new
NEXT app, salespeople can send their customers, who enroll with them, easy-to-
check text messages about fashion news, recommendations, and reminders for
upcoming sales and events. The secure app protects customer information and is
easy for them to opt in and out.
The Rack has also adapted to the new technology to enhance the customer
experience. Mobile checkout is continuing to make a large difference in the store
experience in both speed and convenience for our customers. In 2013, we added
Search & Send and our Rack Alerts app. Search & Send allows salespeople to search
the entire Rack inventory for a desired item and have it delivered to the customer,
all with the mobile registers. The recently launched Rack Alerts app, customers can
tell us what they are looking for and where they want to find it. The Rack Alerts app
puts the customer at the center of his or her own shopping experience.
NORDSTROM NUMBERS
In 2013 Nordstrom had $12.2 billion in total company sales, and a 13.6 percent
return on invested capital (ROIC), which kept us on track with our long-term goals.
Our gross profit percent of net
sales was 36.4 percent.
Although we did not add any new
full-line stores in 2013, we did add
22 new Nordstrom Rack stores,
which helped us to reach out to
new customers and increase our
total company sales. With the
opening of our new Nordstrom
Rack stores we were abole to
increase sales by 12 percent and
same-store sales gained 2.7
percent.
The combination of our new Nordstrom Rack stores along with e-commerce we
haveimproved our sales and made up 38 percent of total company sales. As we
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Nordstrom
common stock
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Retail
Standard & Poor's
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3. continue to open more stores and give our customers more shopping options, we
hope to see these numbers increase.
Retail will continiue to change and we will stay focused on our number one goal of
putting the customer first. As our customers evolve, we want to evolve with them
and serve them to the best of our ability.