NRF Annual Report 2003

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2003 National Retail Federation Annual Report

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  • A N N U A L R E P O R T 2 0 0 3

    EVERYTHING RETAIL

  • ii

    HIGHLIGHTS 03: MEETIN NRF was retails leading advocate in Washington,winning a battle to make national credit reportingstandards permanent and convincing the LaborDepartment to update overtime rules, a move thatwill save retailers $285 million annually.

    THE NATIONAL RETAIL FEDERATIONis the retail industrys largest advocacy organization,

    advancing the industry through professional seminars, trade

    conferences, publications and educational activities and

    influencing the development and content of legislation and

    public policy affecting retailing and the consumer.

    By bringing under the Federation umbrella more than 100 state,

    national and international retail associations that have members

    in most lines of retailing, NRF represents an industry which

    encompasses more than 1.4 million U.S. retail establishments,

    employs more than 20 million Americans about 1 in 5

    U.S. workers and registered sales of $3.6 trillion in 2002.

    NRF also has a sizable international membership of more

    than 1,000 stores in 50 nations abroad.

  • 1he retail industry has undergone quite a transformation over the years. New technologies,

    strategies and partnerships are driving industry growth and change. Even in the midst of all this

    innovation, there is one simple phrase that remains constant: the customer is always right. It was

    true when retail first started and it is true today.

    Retail as we know it is in a constant state of flux. The discounters are selling high-

    end merchandise, department stores are discounting and just about every Internet

    retailer has a traditional foundation. You can even buy gift cards for your favorite

    retailer at your local grocery store. Clearly the lines of retail have blurred as new

    technologies are helping the consumer change the way she shops. Retailers now find

    themselves needing to be everything to everyone. Through it all, the customer still

    needs to come first. We can innovate and redefine all we want. Having our customers

    on board will get us that much closer to success.

    The National Retail Federation works tirelessly for its members, helping us keep up with the

    changing nature of the industry and giving us the tools we need to best serve our customers.

    Through issue advocacy, research and education, NRF has clearly positioned itself as the true

    thought leader of our industry. The rapid pace of change will no doubt continue for the

    foreseeable future. As the retail picture continues to blur, we will look to NRF to help bring

    clarity and help us redefine retail for the future.

    G THE NEEDS OF AN EVOLVING INDUSTRY2003 marked the beginning of asuccessful new format for executivelevel networking meetings with the CFO Summit, CIO Summit/NRFtech andCEO Summit/Mid-Year Board Meeting.

    CHAIRMANS MESSAGE

    GORDON I. SEGALChairman of the Board andChairman of the Executive Committee,National Retail Federationand CEO, Crate & Barrel

  • ts been an astonishing year. In 2003 retailers adopted a wealth of strategies to entice new customers

    into their stores, morphing into new formats, adopting new merchandise strategies and employing new

    technologies to keep ahead of the competition. The whirlwind of change was profound. And consumers

    responded. What emerged was an industry that drove the U.S. economy despite war, weakened con-

    sumer confidence, and losses in the manufacturing sector.

    Just as the retail industry has evolved, so too has NRF, quickening our pace to keep ahead of the tidal

    wave of change. In the past year, NRF, along with other retail plaintiffs, succeeded in a landmark law-

    suit against Visa and MasterCard that established a merchants right to choose what kind of plastic to

    accept. Also in 2003, at NRFs strong urging, Congress made national credit reporting standards perma-

    nent, the Bush Administration agreed to revamp out-of-date overtime rules that subjected retailers to

    needless lawsuits, and NRF continued to battle to reduce protectionist barriers abroad.

    NRF experienced exponential membership growth both in the U.S. and internationally. We launched

    our DecisionMaker Series, events tailored specifically for CEOs, CFOs and CIOs, and achieved unparal-

    leled success. We published the first annual Retail Horizons report, an industry-wide benchmarking

    study that provides an in-depth review of key industry metrics. The NRF Foundation won a $2.8 mil-

    lion grant from the U.S. Department of Labor, allowing us to continue to expand customer service train-

    ing programs around the U.S., and we launched NRF University wired, our distance learning program.

    The prism through which we examine all the accomplishments of 2003 demonstrates unprecedented

    change and retailings impressive knack for reinvention. Through our members vision of our industry,

    we can begin to see ourselves more clearly and realize the greater potential that exists for retailing and

    for NRF going forward.

    NRF and other retail plaintiffs won a $3 billionsettlement in a seven-year-old lawsuit against Visa andMasterCards debit card practices, establishing the rightof retailers to choose what forms of payment to acceptand saving the industry an estimated $100 billion inreduced fees through the end of the decade.

    HIGHLIGHTS 03: MEETIN

    TRACY MULLINPresident and CEONational Retail Federation

    PRESIDENTS LETTER

    2

  • 3TABLE OF CONTENTSRetailers of all types and sizes selected NRF as theirtrade association in 2003. NRF saw increases in bothinternational and domestic members as well as a 97%retention rate among current members.

    G THE NEEDS OF AN EVOLVING INDUSTRY

    Statement of Purpose............................................inside front cover

    Chairmans Message..........................................................................1

    Presidents Letter ..............................................................................2

    Officers and Board of Directors ....................................................4-5

    Government Relations ......................................................................6

    NRF DecisionMaker Series ............................................................10

    Conferences ......................................................................................15

    Public Relations................................................................................18

    Membership ......................................................................................20

    Advisory Committees ......................................................................26

    NRF Divisions ..................................................................................30

    NRF Foundation................................................................................34

    STORES Magazine ............................................................................36

    Financial Information ............................................inside back cover

    CONTENTS

    NRF

  • 4Michael Anthony Chairman, President, and CEOBrookstone, Inc.

    Thomas J. Bata, Sr. Honorary ChairmanBata Limited

    *Robert M. Beall II Chairman and CEOBealls, Inc.

    John M. Belk Chairman and CEOBelk, Inc.

    Adrian Bellamy ChairmanThe Body Shop, Inc.

    Raphael Benaroya Chairman, President and CEOUnited Retail Group, Inc.

    *Robert M. Benham President and CEOBalliets LLC

    Henry Berlin CEOBerlins Brothers, Inc.

    Dorrit J. Bern Chairman, President and CEOCharming Shoppes, Inc.

    Cem Boyner Vice Chairman and CEOBoyner Holding A.S.

    Paul R. Charron Chairman and CEOLiz Claiborne Inc.

    *A. F. Dawahare PresidentDawahares, Inc.

    Andre L.S. de Botton PresidentACV Comercio e Participaes

    Brian Devine Chairman, President and CEOPETCO Animal Supplies, Inc.

    Paul Dottle SVP, RetailAmerican Express Company

    John L. Dunham PresidentThe May Department StoresCompany

    John Eyler Chairman, President and CEOToys R Us, Inc.

    *Donald G. Fisher ChairmanGAP, Inc.

    Joe Flannery PresidentWeavers, Inc.

    *Louis Fortunoff EVP and Human ResourcesDirectorFortunoff Fine Jewelry &Silverware, Inc.

    OFFICERS

    CHAIRMAN OF THE BOARD AND CHAIRMAN OF THE EXECUTIVE COMMITTEEGORDON I. SEGAL Chief Executive Officer Crate & Barrel

    FIRST VICE CHAIRMAN OF THE BOARD AND CHAIRMAN OF THE FINANCE COMMITTEEJAMES M. ZIMMERMANChairman and CEOFederated Department Stores, Inc.

    SECOND VICE CHAIRMAN OF THE BOARDARNOLD B. ZETCHER Chairman, President & CEO Talbots Inc.

    THIRD VICE CHAIRMAN OF THE BOARDRON SACINOPresident & CEOSacinos Formalwear

    CHAIRMAN OF THE AWARDS & NOMINATIONS COMMITTEEARNOLD B. ZETCHER Chairman, President & CEO Talbots Inc.

    PRESIDENT AND CEOTRACY MULLIN National Retail Federation

    CORPORATE SECRETARYH. JAMES BAUMPresidentBaums Inc.

    CHAIRMAN OF THE NRF FOUNDATIONROBERT J. CORLISSPresident and CEOThe Athletes Foot Group, Inc. BO

    ARD OF DIRECTORS

    The Voice

  • NATIONAL RETAIL FEDERATION

    | EVERYTHINGRETAIL

    5

    Carolee Friedlander President and CEOCarolee Designs, Inc.

    *Craig L. Fuller President and CEONational Association ofChain Drug Stores

    *Marvin J. Girouard Chairman and CEOPier 1 Imports Inc.

    Robert A. Glick Chairman and CEODots, Inc.

    John M. Hancock Chief ExecutiveMFI Furniture Group PLC

    Lisa M. Harper Chairman and CEOThe Gymboree Corporation

    George Heller President and CEOHudsons Bay Company

    Philippe Houze Co-CEOGaleries Lafayette Group

    Elliot S. Jaffe ChairmanThe Dress Barn, Inc.

    *M. Farooq Kathwari Chairman, President and CEOEthan Allen Inc.

    *Daniel S.C. Koo ChairmanShui Hing (HK) Limited

    Kazumasa Koshiba PresidentIsetan Company Limited

    *Alan J. Lacy Chairman and CEOSears, Roebuck and Co.

    Joseph W. Levy ChairmanGottschalks Inc.

    Lovro Mandac ChairmanKaufhof Warenhaus AG

    Robert B. Mang CEOGalyans Trading Company

    Manfred Maus Chairman of Supervisory BoardOBI Bau-undHeimwerkermrkte GmbH & Co.

    H. Michael May PresidentMay Brothers ClothingCompany

    James F. McCann Chairman and CEO1-800-FLOWERS.COM

    W. Alan McCollough Chairman, President and CEOCircuit City Stores, Inc.

    Mitchell B. Modell CEOModells Sporting Goods

    Tom Moser Vice ChairmanKPMG

    Edwin T. Mosher PresidentMoshers Ltd.

    *Bruce Nelson Chairman and CEOOffice Depot, Inc.

    Allen Questrom Chairman and CEOJ.C. Penney Company, Inc.

    *Leonard H. Roberts Chairman and CEORadioShack Corporation

    *Daryl Routzahn President and CEORoutzahns

    Stephen I. Sadove Vice ChairmanSaks Incorporated

    Walter J. Salmon Emeritus Professor of RetailingHarvard Business School

    Rowland Schaefer Chairman, President and CEOClaires Stores, Inc.

    Kenneth E. Seiff Chairman, CEO and TreasurerBluefly, Inc.

    Robert A. Smith Co-Vice ChairmanThe Neiman Marcus Group, Inc.

    J. Hill Stockton President and CEONorman Stockton, Inc.

    Marcia Tabler VP Creative OperationsLands End

    Kip Tindell President and CEOThe Container Store

    *Robert J. Ulrich Chairman and CEOTarget Corporation

    John Watson COOHSN

    Barton A. Weitz Executive DirectorUniversity of Florida

    Leslie H. Wexner Chairman and CEOLimited Brands

    *denotes Executive Committee members

    of RetailWorldwide

    National Retail Federation

  • NRF Protects Retail Interestsin the Public Policy ArenaNRF is consistently rated as one of the most

    influential and effective trade associations in

    Washington, offering policy expertise and

    representation on all legislative, regulatory

    and political issues at the federal level. In

    2003, NRF lobbied Congress and federal agen-

    cies on dozens of issues directly affecting the

    retail industry. NRF representation both

    proactive and defensive brought the indus-

    try billions of dollars in economic benefits.

    LEGAL/LEGISLATIVE/REGULATORY ACTIVITY

    =President Bushs $330 billion 2003 tax cut,strongly supported by NRF, included withholding cuts and Child Tax Creditrebate checks that put billions of dollars inextra spending money into consumerspockets in time for the 2003 back-to-schoolseason. Economists credited the cuts as oneof the factors behind improved retail sales in 2003.

    =A lawsuit brought by NRF and major retail-ers against Visa and MasterCards debit cardpractices was settled in favor of retailers.The settlement included $3 billion in dam-ages along with changes in card practicesthat should save retailers an estimated $100billion through the end of the decade.

    =NRF won enactment of legislation to renewFair Credit Reporting Act provisions thatbar states from enacting laws that wouldinterfere with uniform national standardsfor credit reporting. The provisions were setto expire December 31, 2003, and their losswould have driven up the cost of credit,reduced customer service and made func-tions like instant credit difficult.

    =NRF convinced the U.S. Department ofLabor to comprehensively update whitecollar overtime regulations under the FairLabor Standards Act for the first time in 50years. By reducing litigation from overtimedisputes, the update could save retailers$285 million a year in legal costs.

    =NRF persuaded lawmakers to introduce leg-islation that would allow states that simplifysales tax laws to require that all remote sellers including mail-order and Internetmerchants collect sales tax. Once enacted,the legislation will end remote sellers unfairprice advantage and create a level playingfield where all merchants play by the sametax rules.

    =For the fourth congressional session in a row,bankruptcy reform legislation that wouldsave the business community $4 billion a yearwas passed overwhelmingly by the Housewith NRFs support. Backers are now waitingfor Majority Leader Bill Frist to schedule themeasure for a vote in the Senate.

    =NRF emphasized retails top trade prioritieswhile hosting key committee chairmen andother members of Congress at the WorldTrade Organization conference in Cancun.GO

    VERN

    MENT RELATION

    S

    6

    From left, NRF President and CEO, Tracy Mullin, Undersecretaryfor Economic Affairs, Kathleen Cooper, Commerce SecretaryDonald Evans and Evans Chief of Staff, Lisi Kaufman at an

    economic roundtable in Washington, DC, July 21, 2003.

    NRF Senior Vice President and GeneralCounsel, Mallory Duncan, left, testifies at aHouse Financial Services Committee hearingon the Fair Credit Reporting Act inWashington, DC, July 9, 2003. At right isattorney Michael McEneney, who testified onbehalf of the U.S. Chamber of Commerce.

  • 7The failure of the Cancun conference to produce a worldwide trade agreementthreatens to delay the elimination of tariffsand accompanying cost savings for U.S.retailers and consumers, but talks shouldresume in 2004. The relationships forgedduring the conference will help NRF pushfor favorable action on these and other trade issues.

    =NRF convinced the Consumer ProductSafety Commission to scrap a plan thatwould have required retailers to issue andcollect product registration cards for a wide

    range of childrens merchandise. The propos-al would have cost retailers millions of dol-lars to issue the cards, provide returnpostage and maintain records, needlesslyduplicating efforts already put forth bymanufacturers.

    =NRF won House passage of AssociationHealth Plan legislation, which would allowsmall retailers to band together throughtrade associations in order to purchaseemployee health insurance group rates oth-erwise only avai...

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