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A Look Into The Top 10 Department Store Companies

A Chain Store Guide Special Report

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Introduction Chain Store Guide has just released its report of the Top 10 Department Store Companies in the U.S. and Canada. Chain Store Guide is a market research company that focuses on the retail and restaurant industries. The top ten department store companies are ranked by industry sales according to Chain Store Guide. These industry leaders represented 88% of department store sales last year with combined sales of more than $111 billion for fiscal year 2009. These top ten industry leaders operated 4,111 stores and accounted for 80% of the total number of department stores in operation. Following is a brief profile for the top 10 companies. Sears Domestic Hoffman Estates, IL Publicly Held: Yes 2009 Sales: $23,672,000,000 2009 Store Count: 908 Year Founded: 1886 Sears offers its wide range of home merchandise, apparel and automotive products and services through approximately 900 full-line and approximately 1,200 specialty stores in the U.S. At the close of its 2000 fiscal year, Sears operated 863 mall-based retail stores, most with co-located Sears Auto Centers, and an additional 1,200 retail locations including hardware, outlet, tire and battery stores as well as independently owned stores, primarily in smaller and rural markets. In 2002, Sears remodeled stores, added centralized cash registers, and acquired Lands' End. Sears also offers a variety of merchandise and services through sears.com, landsend. com, and specialty catalogs. Sears Holdings, the parent company of Sears Domestic and Sears Canada, is the leading home appliance retailer as well as a leader in tools, lawn and garden, consumer electronics and automotive repair and maintenance. The company's services operations include product installation and repair services, service contracts, selected installed home improvements, and direct response through specialty catalogs. Sears Domestic's comparable store sales and total sales declined 8.7% and 6.5%, respectively, during fiscal year 2009. The decline in comparable store sales includes the impact of having 21 fewer stores. Sales declines were driven by decreases in the home appliance, lawn & garden, and home electronics categories. Macy's Inc. Cincinnati, OH Publicly Held: Yes 2009 Sales: $23,489,000,000 2009 Store Count: 850 Year Founded: 1929 Macy's Inc., formerly known as Federated Department Stores Inc., operates department stores under the names of Macy's and Bloomingdale's in community malls and in downtown and freestanding locations in 45 states, the District of Columbia, Guam and Puerto Rico. The average store at 182,000 square feet is much larger than its immediate competitors, JCPenney and Kohl's, which average 100,000 square feet and 75,000 square feet , respectively. The company's retail stores sell a broad range of merchandise, including men's, women's and children's apparel and accessories, cosmetics, home furnishings and other consumer goods. Stores are diversified by size, merchandise and character of community served. Most stores are located at urban or suburban sites, principally in densely populated areas. Additionally, the company offers an on-line bridal registry to customers. Macy's Inc. in the last few years began making changes in the merchandise it offers by adding exclusive alliances with well-known designer brands. Macy's estimates that exclusive and store labels represent approximately 35 percent of company sales.

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Macy's Inc. is known for creating unique merchandise assortments, operating destination stores and hosting attention-getting community and fashion events, as well as driving innovation in fashion-oriented e-commerce. Macy's and Bloomingdale's are among the most recognized retail brands in America and worldwide. Both Macy's and Bloomingdale's are multichannel brands. Macy's serves customers nationwide through an extensive network of stores, as well as the macys.com web site. Bloomingdale's reaches customers through its stores, bloomingdales.com and the Bloomingdale's By Mail national mail order catalog. The company's latest initiative is to regionalize merchandise mixes in order to cater to local needs. JCPenney Company, Inc. Plano, TX Publicly Held: Yes 2009 Sales: $17,556,000,000 2009 Store Count: 1108 Year Founded: 1902 By the 1920's JCPenney Company, Inc. operated more than 1,400 stores from coast to coast. The company struggled through the 1970s, as upstart retailers such as Walmart began selling similar goods at discount prices and longtime rivals such as Sears provided tough competition in the hardware and appliance departments. A major reorganization during the 1980s changed the company from a mass marketer into a fashion-oriented national department store, placing JCPenney in a strong position to compete in the tough retail climate during the years to come. Previously, most JCPenney stores were located in freestanding or downtown areas but as shopping malls became popular, many stores relocated to these malls. Today while most JCPenney stores are located in suburban malls, the company's off-mall format stores are projected to be the core strategy for growth. The company operates department stores throughout the United States and Puerto Rico, one of the largest apparel and home furnishing sites on the Internet, www.jcp.com, and the nation's largest general merchandise catalog business. The company's core business featuring national, private and exclusive brands consists of providing merchandise and services to consumers through its department store and direct-to-consumer segments. Both generally serve the same type of customer and provide virtually the same mix of merchandise by offering family apparel, jewelry, shoes, accessories and home furnishings. During the last decade the retail chain struggled financially. In response, the company downsized by closing stores and laying off employees and selling non-core assets to raise money and refocus on fashion and housewares. Kohl's Corporation Menomonee Falls, WI Publicly Held: Yes 2009 Sales: $17,178,000,000 2009 Store Count: 1058 Year Founded: 1962 Although somewhat new to the department store industry, Kohl's is now America's fastest-growing department store company. The retailer currently operates 1,058 stores and employs 133,000 associates. Kohl's operates its stores in community, regional, and strip malls, lifestyle centers and freestanding locations. The company offers moderately priced, exclusive and national brand apparel, shoes, accessories, beauty and home products in stores and online. At 76,000 square feet, the average Kohl's store is much smaller than those of its immediate competitors, JCPenney and Macy's, which average 100,000 square feet and 182,000 square feet, respectively. Kohls' offers three store formats: suburban, small and urban.

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Kohl's began by challenging both discount chains and full-service department store retailers with a unique formula of value pricing for name-brand apparel. While some stores are located in enclosed shopping malls, the majority of Kohl's stores are free-standing. The most noticeable distinction between Kohl's and the traditional department store format is that all Kohl's stores have centralized checkouts found at the front entrances to the store. Kohl's initiated the use of a racetrack aisle that circles the entire store, a technique borrowed from discount stores but rarely used in department stores. Developing exclusive collections of worldclass brands is a key growth strategy. While classic American families continue to be Kohl's primary customer, the company has begun adding brands and merchandise targeted to various lifestyles to expand its market share. Nordstrom Inc. Seattle, WA Publicly Held: Yes 2009 Sales: $8,258,000,000 2009 Store Count: 187 Year Founded: 1901 Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with stores located in 28 states. The west and east coasts are the areas in which the company has the largest presence. Nordstrom operates fullline stores, off-price stores called Nordstrom Rack, two Jeffrey boutiques and one clearance store. Nordstrom also serves customers through its online presence at www.nordstrom.com and through its catalogs. Retail stores generate revenues from sales of high-quality apparel, shoes, cosmetics and accessories. In 2009 womens apparel accounted for 34 percent of the company's sales. Shoes accounted for 22 percent, and womens accessories and cosmetics accounted for 12 and 11 percent respectively despite a challenging, economic climate. Total retail sales decreased only a small .2% from 2008 to 2009. Nordstrom Inc. is focusing its store growth on its Nordstrom Rack nameplate. In 2009 the company opened three full line stores and thirteen new Rack stores. In 2010 three new Nordstrom Rack stores have been opened and there are plans for fourteen more by year's end, and for three more full line Nordstrom stores. Dillard's Inc. Little Rock, AR Publicly Held: Yes 2009 Sales: $6,094,948,000 2009 Store Count: 321 Year Founded: 1938 Dillard's Inc. stores offer products from both national and exclusive brand sources. The company operates over 300 Dillard's locations and 12 clearance centers spanning 29 states. Most stores are located in suburban shopping malls and open-air centers primarily in the southwest, southeast and midwest regions of the United States. The company's merchandise offerings include fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods. Consumers can buy products online, and gift registry services are available. Since 2007 the company's total sales have continued to decrease. The company's cost control initiatives that began during fiscal 2008 resulted in reduced operating expenses during fiscal 2009 and the company continues to benefit from improvements in inventory management, focusing on more conservative purchasing. Exclusive brand merchandise makes up about a quarter of the company's total sales.

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Sears Canada Inc. Toronto, ON Publicly Held: Yes 2009 Sales: $4,628,000,000 2009 Store Count: 402 Year Founded: 1953 Sears Canada Inc. operates department and specialty stores, Canada's most extensive general merchandise catalogue, a business over the internet at sears.ca, and offers a broad range of home-related services. Sears offers more specialty services than any other retailer in Canada, including travel offices, hair care centers, optical services, health food shops, portrait studios, income tax services, carpet, upholstery and air duct cleaning, and home installed products and services. Sears Canada conducts retail operations similar to those conducted by Sears Domestic, with a greater emphasis on apparel and other softlines than in the U.S. stores. In its first full year of operations in 1953, Sears Canada had sales of approximately $100 million. Most recently industry sales totaled $4.6 billion. Sears Canada's total revenues decreased 11.6% in fiscal 2009. The decline is mainly the result of lower sales in Sears Canada's Full-line, Direct, Home, Dealer and Outlet channels, partially offset by higher sales in Corbeil stores. The Neiman Marcus Group Dallas, TX Publicly Held: No 2009 Sales: $3,643,300,000 2009 Store Count: 73 Year Founded: 1907 The Neiman Marcus Group is comprised of the specialty retail stores division which includes Neiman Marcus and Bergdorf Goodman stores and the direct marketing division, Neiman Marcus Direct. Headquartered in Dallas, TX the company employs almost 15,000 employees. The Neiman Marcus Group offers assortments of upscale apparel, accessories, jewelry, beauty and decorative home products. The company operates Neiman Marcus stores across the United States and two Bergdorf Goodman stores in Manhattan. The company also operates Last Call clearance centers. These store operations total more than 6 million square feet. Neiman Marcus Direct conducts both print catalog and online operations under the Neiman Marcus, Horchow and Bergdorf Goodman brand names. Under the Neiman Marcus brand, Neiman Marcus Direct primarily offers women's apparel, accessories and home furnishings. Horchow offers quality home furnishings, linens, decorative accessories and tabletop items. Belk Inc. Charlotte, NC Publicly Held: No 2009 Sales: $3,350,000,000 2009 Store Count: 301 Year Founded: 1888 Belk, Inc. is the nation's largest privately owned department store company, and is in the third generation of Belk family leadership. The company operates more than 300 fashion department stores in 16 contiguous southern states and offers a wide assortment of fashion apparel, shoes and accessories for the entire family along with top name cosmetics, a wedding registry and merchandise for the home. Although the company operates 96 stores that exceed 100,000 square feet in size, the majority of Belk stores range in size from 60,000 to 100,000 square feet. Most of the Belk stores are anchor tenants in major regional malls or in openair shopping centers in medium and smaller markets.

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Belk stores occupy approximately 23.4 million square feet of selling space. In fiscal year 2010 comparable store sales for Belk Inc. decreased 4.6 percent. The decrease was due primarily to a significant decline in consumer spending in the first half of the year that was partially offset by improved sales trends in the second half. Some of the company's key initiatives include an improved merchandise turnover rate and fresher inventory, and stronger sales of moderate-priced and private brand merchandise. In 2009 private-brands sales increased to 28.3% of the company's total sales. Other key merchandise focus areas during the past year that produced strong results were denim, sportswear and shoes. Belk Inc. also identified youth, modern, and costume jewelry as additional merchandise focus areas to target for sales and margin growth in the current fiscal year. Hudson's Bay Company Toronto, ON Publicly Held: No 2009 Sales: $3,192,000,000 2009 Store Count: 629 Year Founded: 1970 Hudson's Bay Company is Canada's largest diversified general merchandise retailer, with over 600 retail locations and nearly 60,000 associates located in every province in Canada. The company's merchandise is available in stores and online. Hudson's Bay Company operates retail stores offering private brands of clothing and softlines. The company's four banners are The Bay, Zellers, Home Outfitters and Fields. The Bay is the flagship department store within the Hudson's Bay Company and is a full-line department store chain focused on high-fashion merchandise in apparel, accessories and soft home categories. Zellers is the mass merchandise retailer offering national and private brand merchandise. Home Outfitters is a kitchen, bed and bath specialty superstore chain and is Canada's fastest growing home specialty store. Fields is the Hudson's Bay Company's extreme discount retail format.

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Department Stores by Units 2001-2010

# 1 2 3 4 5 6 7 8 9 10 NAME SEARS DOMESTIC MACY'S INC. JCPENNEY COMPANY INC. KOHL'S CORPORATION NORDSTROM INC. DILLARD'S SEARS CANADA INC. THE NEIMAN MARCUS GROUP BELK INC. HUDSON'S BAY COMPANY CITY # NAME STATE 2010 908 850 2009 CITY 2008 2007 847 CINCINNATI853 853 1093 PLANO 1083 1083 169 SEATTLE 159 159 2006 STATE 2005 868 OH 459 1067 TX 1017 157 WA 150 328 AR 328 187 ON 187 57 TX 49 315 NC 226 585 ON 547 2004 867 459 1020 542 148 333 138 49 221 562 2003 860 455 1043 457 142 331 123 50 214 460 2002 2001 867 459 382 133 342 127 48 219 420 860 440 320 121 339 125 42 208 428 HOFFMAND ESTATES IL 1 SEARS DOMESTIC CINCINNATI 2 MACY'S INC. OH PLANO 3 929 HOFFMAND935 935 ESTATES IL 873 924

JCPENNEY COMPANY 1108 TX INC. 187 321

1074 1088

MENOMONEE FALLS 4 KOHL'S CORPORATION WI 1058 SEATTLE NORDSTROMWA 5 INC. LITTLE ROCK 6 DILLARD'S DALLAS 8 AR

1004 MENOMONEE FALLS 929 929 817 WI 637 315 LITTLE ROCK 326 326 388 TORONTO 196 196 57 307 CHARLOTTE 303 315 629 TORONTO 585 598

TORONTO SEARS CANADA INC. 402 7 ON CHARLOTTE 9 BELK INC. NC 301

THE NEIMAN TX MARCUS73 GROUP DALLAS 65 56

TORONTO HUDSON'S BAY COMPANY 10 ON 629

Department Stores by Sales 2005-2010

# NAME 1 SEARS DOMESTIC 2 MACY'S INC. 4 KOHL'S CORPORATION 5 NORDSTROM INC. 6 DILLARD'S 7 SEARS CANADA INC. 8 THE NEIMAN MARCUS GROUP 9 BELK INC. HUDSON'S BAY COMPANY # PUBLICLY HELD 2007 2006 2005 PUBLIC 2010 NAME 2009 2008 1 SEARS DOMESTIC YES $23,672,000,000 $25,315,000,000 YES $27,845,000,000 $29,179,000,000 $30,038,000,000 $31,254,000,000 2 MACY'S INC. YES $23,489,000,000 $24,892,000,000 YES $26,313,000,000 $26,970,000,000 $22,390,000,000 $15,630,000,000 YES YES YES YES NO NO NO 3 JCPENNEY $18,486,000,000 YES $17,556,000,000 COMPANY INC. $19,860,000,000 $19,903,000,000 $18,781,000,000 $18,096,000,000 4 KOHL'S CORPORATION $17,178,000,000 $16,389,000,000 YES $16,473,734,000 $15,544,184,000 $13,402,217,000 $11,700,600,000 5 NORDSTROM INC. YES $8,560,698,000 $7,722,860,000 $7,131,388,000 $8,258,000,000 $8,272,000,000 $8,828,000,000 6 DILLARD'S $6,830,543,000 $6,094,948,000 7 SEARS CANADA INC. $4,628,000,000 $5,236,000,000 8 THE NEIMAN MARCUS $3,643,3000,000 $4,600,500,000 GROUP 9 BELK INC. $3,490,000,000 $3,350,000,000 10 HUDSON'S $3,192,000,000 $3,192,000,000 BAY COMPANY YES $7,207,417,000 YES $5,602,000,000 NO $4,390,100,000 NO $3,824,800,000 NO $2,055,267,000 $7,636,056,000 $5,933,000,000 $4,030,100,000 $3,684,769,000 $2,988,848,000 $7,551,698,000 $6,238,000,000 $3,584,247,000 $2,968,777,000 $2,639,480,000 $7,522,060,000 $6,230,500,000 $3,379,480,000 $2,446,832,000 $2,686,500,000 3 JCPENNEY COMPANY INC. YES

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