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

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    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 available to companies withlarge numbers of employees. The proposalcould save companies between 15 and30 percent of current premiums.

    =The House passed class action reform legis-lation that would reduce the number of friv-olous lawsuits faced by retailers and otherbusinesses by forcing more cases into federalcourt. Major retailers have been a particulartarget of forum shopping because the pres-ence of stores in multiple states makes iteasy for plaintiffs attorneys to find a sympathetic judge.

    =NRF won House approval of legislation tomake repeal of the federal estate tax perma-nent. Permanent repeal is important tosmall, family-owned businesses, which oftenmust be sold to pay estate taxes. Temporaryphase-out began in 2001 but the tax willreturn in 2011 if a permanent repeal is not enacted.

    NATIONAL RETAIL FEDERATION

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    JCPenney Vice President and AssociateGeneral Counsel and member of theNRF Policy Council Bob Hood, left, discusses key legislation with HouseFinancial Services CommitteeChairman Michael Oxley, R-OH.

    U.S Senator Christopher KitBond, R-MO, right, with U.S.Senator Jim Talent, also R-MOat an NRF Meeting inWashington, DC.

    Left to right, Steve Pfister, NRF Senior VicePresident for Government Relations, and Nate

    Garvis, Target Corp. Vice President forGovernment Affairs and Chairman of the NRFPolicy Council, discuss key issues with U.S.

    Senator Robert Bennett, R-UT.

    Left to right, U.S. Secretary ofthe Treasury John Snow, Sears,Roebuck and Co. CEO AlanLacy and Crate and BarrelCEO Gordon Segal at the NRFMid-Year Board Meeting andCEO Washington Summit.

    Maureen Riehl, NRF Vice President and State and Government RelationsCounsel, speaks at a news conference announcing introduction of theSimplified Sales and Use Tax Act.

    U.S. Treasury Secretary John Snow discusses the holiday retail sales outlookat a private breakfast meeting with NRF member CEOs in New York City,including Paul Charron, Chairman and CEO, Liz Claiborne; Fred Wilson,President & CEO, Saks Fifth Avenue; Allen Questrom, Chairman and CEO,JCPenney; Steve Sadove, Vice Chairman, Saks Incorporated; Farooq Kathwari,Chairman, President and CEO, Ethan Allen; Gordon Segal, CEO, Crate andBarrel; Tracy Mullin, President and CEO, NRF; and Louis Fortunoff, EVP,Fortunoff Fine Jewelry and Silverware.

  • 8=NRF convinced lawmakers to introduce leg-islation that would make organized retailtheft a federal felony. Criminals stealingmore than $5,000 in goods during a six-month period and then offering them forretail sale could face 10 years in prison.

    =NRF stood up to textile protectionists andconvinced the U.S. government not to imposequotas at levels that would have effectivelyended trade with Vietnam and cost apparelretailers hundreds of millions of dollars. Theagreement signed between the two nationswill allow up to $1.65 billion in annualtrade, with an annual increase of 2 percentfor wool products and 7 percent for cotton.

    As part of NRF'sGrassroots efforts,U.S. RepresentativeJim Gerlach, R-PA,speaks to NRF retailmembers about keyretail issues inWyomissing, PA.

    House Majority Whip Roy Blunt,R-MO, addresses the crowd during the NRF Washington

    Leadership Conference.

    GOVERNMENT RELATIONS

    POLITICAL ACTIVITY

    =2003 wasnt an election year, but NRFsRetailPAC nonetheless remained active bycontributing more than $50,000 to the cam-paigns of more than 30 House and Senatecandidates from RetailPAC, and hostingretail fund-raising events for a dozen Houseand Senate members that raised more than$160,000. NRFs support went to a whoswho of prominent lawmakers such asSenate Banking Committee ChairmanRichard Shelby; Senate Finance CommitteeChairman Charles Grassley; Senate Health,Education, Labor and PensionsCommittee Chairman Judd Gregg;House Majority Whip RoyBlunt; and House FinancialServices CommitteeChairman Mike Oxley.Separate fromfund-raising activities,NRF also hosted a series of RetailEducation Eventbreakfasts across thecountry, where localretailers could meetfreshmen Members ofCongress andeducate them onthe industrys legislative priorities.

  • NRF Washington LeadershipConference Takes Retail Issues to Capitol Hill

    NRFs 68th Annual Washington LeadershipConference brought close to 150 retail execu-tives, state retail association leaders and inde-pendent storeowners from across the nationtogether to meet with members of Congress oncritical retail priorities.

    Commerce Department Undersecretary forEconomic Affairs Kathleen Cooper, SenateRepublican Conference Vice Chairwoman KayBailey Hutchison, R-TX, and House MajorityWhip Roy Blunt, R-MO, were the main speakersduring the June meeting in Washington. Theconference also included events with SenateFinance Committee Chairman Charles Grassley,R-Iowa, and Senator Blanche Lincoln, D-AR.

    Cooper gave NRF credit for helping to passPresident Bushs $350 billion 2003 tax cut,which pumped billions of dollars of extraspending cash into consumers pockets duringthe back-to-school spending season and helpedboost retail sales. Hutchison and Blunt prom-ised help on industry tax priorities such asmaking the estate tax repeal permanent, short-ening the depreciation period on retailimprovements and requiring that remote sellersplay by the same sales tax rules as brick-and-mortar stores. Other key discussion topics dur-ing the two-day event included bankruptcyreform, trade issues, Fair Credit Reporting Actreauthorization, health insurance costs andspam e-mail.

    In addition to attending briefings andspeeches, retailers fanned out across CapitolHill for dozens of lobbying meetings with law-makers and their staffs. The conference alsoincluded the traditional congressional recep-tion at the U.S. Capitol attended by a numberof prominent lawmakers.

    State and National Conference Highlights State-Level Retail Issues

    More than 150 retail executives from across thenation gathered on Cape Cod this year forNRFs 27th Annual Conference of State andNational Retail Executives.

    While NRFs government affairs efforts inWashington are focused primarily on federalissues, the state and national conference pro-vides an annual forum for retail executives tonetwork and discuss issues of concern to theretail industry on the state level. All 50 stateretail associations are invited to attend. Inaddition to the state associations, a number ofspecialized national associations participate,such as NRFs National Council of ChainRestaurants division, the National Associationof Chain Drug Stores, the Food MarketingInstitute and the Direct Selling Association.The conference also receives strong participa-tion from major retailers and companies thatprovide services to retailers. For the first time,NRF co-hosted the conference with theInternational Mass Retail Association, a spe-cialty group that became an NRF member dur-ing 2003.

    A highlight of this years conference was thepresentation of NRFs annual Legislator of theYear award to New York State Senator StephenM. Saland. Retail Council of New York StatePresident and CEO James Quaremba receivedthe Thomas Weyant Award for State RetailAssociation Achievement.

    The conference featured discussions on sup-ply chain security, sales tax simplification, pro-posed new overtime rules, electronics recyclingand other issues. The conference also includedthe annual meeting of the Conference of StateRetail Associations.

    U.S. Senator Kay BaileyHuthchison, R-TX, addresses retail attendees at the WashingtonLeadership Conference.

    9

    NATIONAL RETAIL FEDERATION

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  • NRFs Mid-Year Board Meeting and CEOWashington Summit featured an impressivelineup of Congressional and Administrationleaders including White House Chief of StaffAndrew Card, Commerce Secretary DonaldEvans, Speaker of the House Dennis Hastert,

    Senate Majority Leader Bill Frist, SenateMinority Leader Tom Daschle and a number ofcommittee chairmen. Discussions centered ontax policy, health insurance costs, tort reform,Fair Credit Reporting Act reauthorization, elimination of trade quotas in 2005, and bankruptcy reform. Networking included aprivate reception and dinner with TreasurySecretary John Snow.

    10

    NRFs successful new Decision -Maker Series networkingmeetings for senior corporateexecutives brought CEOs,CFOs and CIOs together inthree separate events in 2003to discuss common issues,share information and learnabout the factors that areaffecting our industry.

    NRF DE

    CISIONMAK

    ERSERIES

    Speaker of the House, Dennis Hastert, R-IL,speaks with Alan Lacy, Chairman and CEO, Sears.

    Gordon Segal, CEO of Crate & Barrel andChairman of the NRF Board of Directors,left, shakes hands with U.S. Secretary ofCommerce, Donald Evans, after Evans spokeat NRF's Mid-Year Board Meeting and CEOWashington Summit.

    CEOWASHINGTON SUMMIT

    Senate Majority Leader Bill Frist (R-TN), shares a lightheartedmoment with members of NRFs Board of Directors during the 2003CEO Washington Summit.

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    Senate BudgetCommittee Chairman,Don Nickles (R-OK),discusses tax and

    budget measures asGordon Segal, CEO,Crate & Barrel and

    Tracy MullinPresident and CEO,

    NRF listen.

    White HouseChief of Staff,Andrew Card,addresses theNRF Board at aprivate meetingduring the CEOWashingtonSummit.

    Senate Minority Leader, Tom Daschle, D-SD, jokes with thecrowd as Gordon Segal, CEO, Crate & Barrel watches.

    Treasury Secretary John Snow speaks withChairman and CEO, Federated Department Stores,Jim Zimmerman.

    NRF Board of Directors Chairman Gordon Segal,left, shakes hands with Senator Robert Bennett,R-UT, Chairman of the House-Senate JointEconomic Committee.

    NATIONAL RETAIL FEDERATION |EVERYTHINGRETAIL

    Senate Foreign Relations Committee Chairman Richard Lugar (R-IN), answers directors questions about current internationalaffairs.

    Mitchell Modell, CEO, Modells Sporting Goods, Alan Lacy, Chairman and CEO,Sears, M. Farooq Kathwari, Chairman, President and CEO, Ethan Allen, DarylRoutzahn, President and CEO, Routzahns, Robert Benham, President and CEO,Balliets, Kip Tindell, President and CEO, The Container Store, and Robert BeallII, Chairman and CEO, Bealls, listen to a presentation on key retail issues.

    Senate Finance CommitteeChairman Charles Grassley,R-IA, speaks to the NRFBoard of Directors.

    Senate Judiciary Committee Chairman Orrin Hatch, R-UT,speaks to NRF board members. At right is Ron Sacino,President and CEO of Sacinos Formalwear and chairman ofthe NRF Independent Stores Board.

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    IT Leadership Summit Focuses on Emerging Technologies and Issues Facing the Retail Industry

    NRFs CIO Council, the retail industrys establishedcorps of premier retail CIOs, advanced and refined itsannual invitation-only summit in San Diego lastAugust. Retail IT leaders representing the depth anddiversity of the industry convened to network withpeers, learn from experts, discover innovative ideasand gain awareness of the latest technologies throughthe accumulated wisdom of the trades early adopters.Global participation and interest was clear as retailersfrom over seven countries were represented, includingMexico, Canada, Venezuela, Spain, Saudi Arabia,Germany and the United Kingdom.

    Selected Key Trends and issues included:=Offshore Software Development. There is a

    marked resurgence in selective outsourcing as retail-ers of all sizes are in self-reflection mode to reviewtask management and core competencies in responseto the relentless pressure to reduce costs. This wasindicated in the NRFtech attendee poll that revealedthat 62% of attendees thought that project cost wasthe largest benefit of offshore development.Technology leaders are increasingly using offshoreresources to handle software maintenance and devel-

    CFO Summit Attendees listen to apresentation on strategies to

    improve the bottom line.

    U.S. Treasury Department AssistantSecretary for Tax Policy Pamela F. Olson

    speaks at the National Retail Federation CFOSummit in Washington, DC, June 18, 2003.N

    RF DECISION MAKER SERIES

    CFOJunes CFO Summit in Washington brought togethersenior financial executives from leading retailersacross the country to discuss strategies to improvetheir bottom line. Topics focused on maximizing theROI of technology investments; managing the cost ofhuman capital investments; and using corporate gov-ernance to maximize a companys value. In addition tolively roundtable discussions, networking included aDine-Around-D.C. restaurant-hopping event that pro-vided for interaction in small, intimate groups with agathering at the end for coffee and dessert.

    Robin Lynas, CIO, MarksWork WearHouse (Canada),speaks at NRFtech on hiscompanys POS initiatives.

    Chris Carroll from The Bombay Co. enjoysthe luncheon speaker.

    Dave Hogan, SVP and CIO, NRF, duringintroductions at NRFtech 2003.

  • NATIONAL RETAIL FEDERATION

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    opment and other time-consuming areaswhere retailers simply dont have the in-house expertise. Retail CIOs look favorably onthe noted advantages of cost, quality, value,process and an increase in agility and pro-ductivity. Selective outsourcing enables therequired flexibility and control needed tosupport the fast-growing scope and scale ofinfrastructure as sales increase and companiesmove toward globalization.

    = Fraud Prevention. An excess of $1 billionper year can be traced to payment fraud interms of ID theft, counterfeit, lost/stolen pay-ment devices, consumer-not-present purchasesand payment kiting. Merchants, along withthe government and consumers, share in theresponsibility of fraud issues and implications,and continue to look at a combination of tech-nology and best practices in fraud preventiontechnology. Speed, detection, and simplicity,with the interest in retaining the customerrelationship were marked as essential needs.

    =POS Selection. Point of sale is on the radarscreen of retail CIOs as it tops the list ofmajor technology investments. A distincttrend for open systems that provide retailerrequirements for flexibility, enriched cus-tomer service at the point of sale, a move toreal time retailing and cost management isduly recognized. New POS selections willalso provide the prerequisite and blueprint tofuture enhanced technologies such as chipand PIN. An NRFtech audio response systempoll indicated that over 43% of attendeesplan on replacing both hardware and soft-ware components over the next 18 months(from August 2003).

    =Radio Frequency Identification (RFID).Touted as the retail industrys Next BigThing, RFID promises were revealed as MetroAG, a $54 billion retail giant, unveiled itsvision of the future by employing a powerfulcombination of wireless equipment and RFIDtechnology that boosted in-store efficiency,micro-marketing and ended long checkoutlines. Wireless-controlled price displays,smart shelves with re-stock knowledge,handheld scanners for tracking in-store products, and shopping carts with touch-

    Offshore Software Development Panel Discussion with Retail CIOs.Moderator Brian Kilcourse, former CIO of Longs Drugs & Director ofResearch, Retail Systems Alert Advisory Service, hosts a CIO panel discus-sion on offshore software development with Bill Homa, CIO, Hannaford Bros,Cathy Curless, CIO, Payless ShoeSource, Richard Baldyga, Infosys and RickJewell, Oracle.

    CIONRFtech 2003

    Victoria Cantrell,CIO, Giorgio ArmaniCorporation, inattendance.

    Jon DellAntonia,VP, IT, OshKoshBGosh, Inc.,questions anNRFtech panel.

    13

    Natalia Caamano fromCentrobeco C.A (Venezuela),takes advantage of theCyber Caf.

  • 14

    screens enabling automatic checkout and in-store directions were displayed via video.RFID is seen as having a big impact on theretail industry supply chain over the next tenyears with widespread adoption estimated at

    five years. General trends includepilots, marked by building scala-ble business cases and processesand incorporating widespreadtesting and prototyping. Whileretailers may vary in levels ofurgency in their RFID approach,those that continue movementdown this path are seen as retain-ing their competitive ability inthe future.

    = Supply Chain. Supply chain managementcontinues to be a priority issue for the retailCIO as a core source of strategic value andROI via efficiencies in business process

    improvement and technology deployment.Increased demand-chain visibility, controlacross the enterprise, as well as connectingcustomers and data directly into the supplychain are seen as drivers to reduce operationalcosts, improve customer service and maximizeprofits. A number of NRF CIO Council mem-bers have noted the implementation of newmerchandising, warehouse management andsupply chain management solutions to achievethese very goals. Many are quickly shifting toXML to enable communications with suppliersand others are choosing third-party solutions.

    Enriched customer service, cost managementand best practices were the focus of this mar-quee summit. Attendees noted anticipation andexcitement at both the challenges and promisesof the future of retail technology. Members willconvene again at 2004 NRFtech: IT LeadershipSummit, August 810, San Diego.

    Donna Arnold from The Bombay Co.and Germaine Palangdao, NRF, look on.

    Eric Peters, ManhattanAssociates, discusses thelatest in RFID.

    Zygmunt Mierdorf, CIO of Metro AG (Germanyslargest retailer) shares concepts of the Storeof the Future initiative a concept storedesigned to test RFID and cutting-edge tech-nologies under real-world conditions.

    Bill Homa, CIO, Hannaford Bros. duringa panel discussion.

    Joe Giordano, VP,Business and ProductDevelopment, SpeedpassNetwork, Exxon MobilCorporation, shares hisexperience in fraud prevention technology.

    Food retailer CIOs Zygmunt Mierdorf of Metro AG(Germany) and Bill Homa, Hannaford Bros. gettogether during a break.

    Evelyn Follit, CIO, RadioShack, Randy Mott, CIO,Dell, and Steven Raish, CIO, JCPenney, share timeduring a break.

    Tim Viskocil of Henkel ConsumerAdhesives talks about RFID initia-tives from the supplier side.

    Terry Corley, SVP &CIO, Army & Air ForceExchange Service andDale Achabal, Director,Retail ManagementInstitute, Santa ClaraUniversity, take timeduring a break.

    NRF DECISION MAKER SERIES

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    Retails BIG Show: NRF 92nd AnnualConvention & EXPORetails BIG Show was even bigger in January 2003,growing into the larger space on the upper level of theJavitz Convention Center. And the retail industrydescended en masse on New York City for the NRF92nd Annual Convention & EXPO. Retails BIG Showis known for its expert speakers, wide variety of edu-cational programming, networking events and massiveexhibit hall. Although the economy was stalling at thetime, attendance was strong: more than 12,000retail industry professionals and partners from50 countries attended the premier industrygathering. 327 companies tookpart in the EXPO, offering the latest products and services available to retailers.

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    CONFERENCES

    Left to right, Jean Paul Giraud, CEO of the Fnac division ofFrench retailer Pinault-Printemps-Redoute, Dennis Madsen,President and CEO of Recreational Equipment Inc., and TomCole, Chairman of Federated Logistics and Operations divisionof Federated Department Stores, participate in a panel on thefuture of customer experience.

    Paul Charron, Chairmanand CEO, Liz Claiborne,moderates theTuesday morningSuper Session.

    Ethan Allen Chairman, Presidentand CEO, M. Farooq Kathwari,left, receives the NRF Gold

    Medal Award from NRFBoard Chairman and CEO

    of Crate and Barrel,Gordon Segal.

    Kenneth Chenault, Chairman and CEO ofAmerican Express, welcomes attendees tothe Annual Retail Industry Awards Luncheon.

    Bruce Nelson, Chairman & CEO, OfficeDepot shares his thoughts on the

    importance of staying competitive ina super session panel discussion.

    Payless ShoeSource CEO,Steven Douglass speaks aboutmanaging strategic flexibilityin a world of retail change atthe Tuesday Super Session.

    Metro AG CEO, Hans-Joachim Korber, left, accepts the NRF

    International Retailer of the Year Award from Gordon Segal,

    CEO of Crate & Barrel and Chairmanof the Board of Directors, NRF.

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    Retail marketers got connected at the 51stannual Retail Advertising Conference, held atthe Chicago Hilton, February 5-7, 2003.

    More than 900 attendees including retailmarketing professionals and representativesfrom television, radio, print and advertisingagencies took advantage of this opportunity toshare their knowledge and passion for theindustry we love, loathe and couldnt possiblyleave.

    Through a partnership with Second City TVand Ambrosi, RAC attendees were entertainedwith satirical comedy through the productionof SKU YOU, which presented the retailindustry through their unique style of improv.They showed us retail like wed never seen itbefore.

    Speakers for RAC included Gordon Cooke,President/CEO, J. Jill Group, Inc., Mike Potter,Chairman/CEO, Big Lots, Gordon Segal,

    Founder/CEO, Crate & Barrel and JimMcDowell, VP Marketing, BMW NorthAmerica, LLC.

    The RAC Awards Dinner presented the bestand brightest television, radio and print adver-tising work from around the world. MarshallFields was awarded the Best of the Best takinghome the top honorsof RAC 2003 andMichael Francis,Executive VicePresident,Marketing, TargetCorporation wasinducted into theRetail AdvertisingHall of Fame.

    RAC2003RETAIL ADVERTISING CONFERENCE

    Gordon Segal, CEO, Crate andBarrel speaks about his pas-sion for retailing in his keynoteaddress at the 51st annualRetail Advertising Conferenceat the Chicago Hilton.

    Mark Pearson, President ofAmbrosi, prepares the crowdfor a presentation by SecondCity that gave us an entirelydifferent view of our industry.

    Michael Francis, EVP Marketing, Target Corporation, acceptshis induction into the Retail Hall of Fame during the RACAwards Dinner.

    CONFERENCES

  • CRMretail

    NATIONAL RETAIL FEDERATION

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    The second NRF CRMretail Conference, heldMarch 19-21, 2003 in Baltimore, MD, hosted animpressive cross-section of retail CRM manage-ment. Attendees from marketing, IT, and cus-tomer service sectors gathered to hear casestudies and to explore new solutions.

    The CRMretail Study, presented in part-nership with Ogden Associates and GartnerDataquest, revealed market strategies and tech-niques across channels, enabling systems andtools, and CRM adoption cycles and challenges.This research led the group to consider theeffects of measuring quality in all processesthat impact the customer experience. Throughthe CRM Idea Exchange Network, NRF contin-ues to follow the developments of CRM pro-grams and initiatives in retail. This networkfacilitates communication betweenretail executives who are responsiblefor the implementation of CRM intheir companies. The 2004 confer-ence will feature a Disney Institutepresentation on customer loyalty.CRM remains an area of high interestand capital investment for retailers.

    17

    Brian Wright, Director, MarketingBudgets and Analysis, SaksDepartment Stores answers ques-tions from the audience at thisyears CRMretail conference.

    Teresa Finn fromInterelate introducesretail industryexperts panel for theCRMretail conference.

    Tim Anglum, Director-CRM Systems for Best Buyserved as Chairman of the NRF CRM Idea Exchangenetwork. Tim is seated here with Michael Leblancfrom Hudsons Bay answering questions during a paneldiscussion on CRM Best Practices.

    The Loss Prevention AdvisoryCouncil produced anotherimpactful and educationalconference for the LossPrevention community. Thisyears conference featured amemorable keynote from no-nonsense motivational speakerLarry Wingate, and ourlargest exhibitor floor in thehistory of the conference. Keyareas of focus this year havebeen organized retail crime,online auction fraud, identitytheft and the development ofRFID technologies and itsapplication to loss prevention.There is also increased focuson improving the workingrelationship between retailmanagement and mall manage-ment during times of threat orcrisis. There will be continuedfocus on Risk Management inthe retail environment and theInternal Audit AdvisoryCouncil has evolved its pur-pose and its goals and is nowknown as the RiskManagement and ControlExecutives Advisory Council.

    LOSSPREVENTION

    Attendees watch a general session presentation on the big screen.NRFs Loss Prevention Conference & Exhibition continues to growbeyond expectations.

    Rich Mellor, DVP, LossPrevention, HelzbergDiamond Shops,addresses the crowdat the opening of theWednesday generalsession.

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    NRF continues to be viewed as the thoughtleader of the retail industry, providing thenews media and analysts with accurate infor-mation and insightful commentary about ongoing issues such as the economy, retailsales, retail trends and public policy issues fac-ing the industry. In 2003, we also helped assessthe impact of one-time events such as the warin Iraq that influenced consumer confidenceand the huge power blackout that closedcountless stores in the Northeast and Midwestin August. Major PR campaigns also helpedpush important legislative goals such as FairCredit Reporting Act reauthorization, the FairLabor Standards Act overtime update and salestax simplification, among others.

    NRF provides groundbreaking research to themedia and the media look to NRF first forinformation on holiday sales and a pulse on retailing trends. In 2003, NRF:

    =Expanded the NRF Consumer Intentions andActions survey to develop careful analysis of all retail holiday trends and industry segments.

    =Hosted a widely covered news conference inTimes Square to announce NRFs holidaysales forecast. The announcement quicklyemerged as a big story and helped set a positive tone going into the vital holidaymonths.

    =NRF was quoted or mentioned in nearly3,000 articles including 37 in the New YorkTimes, 38 in the Washington Post, 29 in theWall Street Journal and 24 in USA Today.

    =NRF appeared on virtually all major network and cable TV news programsincluding ABC, CBS, NBC, Fox, CNN, CNBCand Bloomberg, and earned coverage inmajor magazines such as Newsweek and U.S.News and World Report. NRF spokespeoplewere cited by all of the major wire servicesand in a number of major local newspapersacross the country, including the LosAngeles Times, the Atlanta Journal-Constitution, the Cleveland Plain Dealer, the Minneapolis Star-Tribune and theChicago Sun-Times to name just a few.

    PUBLIC RELATIONS

    www.nrf.com

    NRF President and CEO Tracy Mullin discusses the state of theretail industry during an interview on CNBCs Morning Call

    NRF continues tobe viewed asthe thoughtleader of theretail industry

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    =The NRF Radio Actuality Line wasupgraded to allow radio stations to down-load sound bites from www.nrf.com/radiorather than over a telephone line. Theupgrade improves sound quality and allowssound bites on multiple topics to be offeredsimultaneously. Deadline-driven radio sta-tions from coast to coast have made use ofthe 24/7 service, helping expand NRFs outreach to the broadcast media.

    =The NRF News Photo Service made nearly100 news photos from NRF events availableto the media on a same-day basis. The serv-ice also fills the needs of member companiesneeding photos in a hurry.

    =The Public Relations section of the NRF website, serving NRF members, the media andthe analyst community, has been redesignedto make it even easier to find critical indus-try information such as archived newsreleases, full reports of consumer researchand executive biographies.

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    www.nrf.com

    NRF Chief EconomistRosalind Wells discussesNRF's retail sales outlookwith members of thepress during a news con-ference in New York City

    Toys R Us Vice Chairman Richard L. Markee speaks at aNational Retail Federation news conference to announce theannual holiday sales forecast September 16, 2003, at the ToysR Us Times Square store in New York City.

    Swan Lake Barbie, left, assists U.S. Treasury Secretary John Snow,center, in selecting holiday gifts for his grandchildren at Toys R Usin New York. At right is Toys R Us Chairman, President and CEO, JohnEyler.

    Steven J. Pfister, NRF Senior Vice President, GovernmentRelations, is asked about key legislative issues during an interview on NBC Nightly News

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    For the third year in a row, NRFs membershipmix has maintained a healthy cross-section ofall segments, with increases in the sports andentertainment categories. And in 2003, for thefirst time since fiscal year 2000, NRF exceededgoals for new member recruitment and reten-tion. Were proud that the majority of the 2003STORES Magazine Top 100 Specialty Retailersare NRF members. NRFs member base is thebroadest and most experienced gathering ofretailers anywhere. This depth of knowledgemakes our member committees, list serves, andadvisory boards the industrys best.

    = International retailers are 15% of NRF totalmembership

    = Online retailing is 6% of NRF total membership

    = 17% of NRFs membership are retailersunder $1 million in annual sales

    = 30% of NRFs membership are retailers with annual sales over $100 million

    Member Feedback Creates SuperbValue Proposition In 2003, NRF expanded the content on ourMembers Only web site, launched newvalue-added services, and spent time visitingretailers personally to learn the wants andneeds of our expanding member base. FromMarch to September 2003, NRF staff visitedover 30 retail companies in Atlanta, Chicago,New York, London, Houston, San Diego, theDominican Republic, Los Angeles, Columbus,OH, and San Francisco.

    Members-Only Web Site EnhancementsFosters Knowledge TransferNow members can visit the Member ServiceCenter and look up member staff by retailissue, subscribe to NRFs nine specialty newslet-ters, and in test mode as of this printing, renewtheir NRF membership online. Members can also send a friend membership information!

    MEM

    BERSHIP

    2003 RETAIL MEMBERSHIP BY TYPE

    Discount Dept. Stores3%

    Sports,Entertainment

    4%

    Food, Beverage1%

    Furniture5%

    Department Stores14%

    Computers,Electronics

    1%Arts, Collectibles, Gifts

    6%

    Apparel,Accessories, Shoes

    22%

    Hardware, HouseCtrs., Housewares

    2%Jewelry2%

    Specialty (Auto, Drug, Office, Pet, Toys)40%

    We joined NRF and Shop.orgbecause we share a commongoalto make retail better. We arestriving to be a great company thatboth our customers and employeescan look up to. NRF provides uswith the knowledge and tools tomake this happen.

    Eric Lituchy, CEO,DelightfulDeliveries.com, Syosset, NY

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    Monitor the latest legislation through the state-by-state monitoring tool iStateLink or clickthrough our Alerts section. Download sur-veys, NRF seminar handouts, reports fromNRFs business partners, and telebriefing tran-scripts under the Retail Discipline Topics in:

    =Business Continuity

    =Finance

    =Human Resources

    = Information Technology

    =Marketing

    =Supply Chain

    Discount Dept. Stores3%

    Sports,Entertainment

    4%

    Food, Beverage1%

    Furniture5%

    Department Stores14%

    Computers,Electronics

    1%Arts, Collectibles, Gifts

    6%

    Apparel,Accessories, Shoes

    22%

    Hardware, HouseCtrs., Housewares

    2%Jewelry2%

    Specialty (Auto, Drug, Office, Pet, Toys)40%

    21

    A photo opportunity forthe management teamfrom NRF member,Pebble Beach Company,during a member visitby NRF staff.

    Although I have been a member of NRF with previous organi-zations for many years, I was not fully utilizing all of the ben-efits. When NRF came to present all the facets of the organi-zation to Giorgio Armani, we included representatives frommany areas of our company for the meeting. As a result,everyone from the C-level to store personnel is utilizing themany benefits that NRF Membership entails. The benefitsderived from expanding our use of all that is offered certainlypays for the membership fee.

    Victoria Cantrell, SVP/CIO, Giorgio Armani Corporation, New York, NY

    We place a high valueon our NRF member-ship. Our active partici-pation in NRFsFinancial ExecutivesCouncil has enabled usto work with fellowmembers in shapingaccounting principlesthat impact our indus-try. The benchmarkingdata and the informa-tion exchanges on criti-cal accounting andfinance topics are toolswe use to keep pacewith todays fast-changing business andregulatory environment.

    Darren R. Jackson,EVP/Finance andCFO, Best Buy Co., Richfield, MN

    Carleen Kohut, NRFSenior Vice Presidentand CFO, visits with NRF MemberSilver Lining.

    New Services Increase Member CollaborationNRFs DecisionMaker Series was launched in2003 a series of c-level, invitation-onlyevents for the retail CEO, CIO, and CFO. NRF members can send their representativesfree of charge to these intimate, issue-specificbriefings.

    NRF SmartBrief, an e-newsletter compilingdaily headlines and media features from dozensof sources, is a free subscription servicelaunched summer 2003.

    Best Practice Telebriefings, launched lastyear and offered quarterly, have now beenexpanded to monthly calls. NRF committeesdetermine the content, and all NRF members

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    are welcome to dial in. Visit Members Onlyto stay informed on upcoming calls regarding:

    = Customer Relationship Management

    = Financial Executive Issues

    = Emerging Trends in Wage and HourLitigation

    Member Benefits In January 2003, the National Retail Federationand Retex partnered to create an expanded,effective and efficient buying group program.Using a cooperative group-buying concept,Retex negotiates pricing agreements to helpcompanies take advantage of state-of-the-arttechnologies.

    Retex aligns itself with the top providers ofproducts and services to enhance an organiza-tions profitability. The list of available pro-grams continues to grow and includes:

    =Voice, Data & Internet Products

    =Audio, Video and Web Conferencing

    =Credit and Debit Card Processing

    = Information Security Solutions

    =Arbitration and Mediation Services and more

    Additionally, NRF members continue toreceive Work Opportunity Tax Credit (WOTC)and Welfare to Work (WtW) administration,State Incentive consulting and other moneysaving programs through Member Servicespartner, CIC Enterprises.

    Members can expect NRF to look for newcost saving programs and service providers in 2004.

    MEM

    BERSHIP

    We joined NRF for a plethora of reasons, the most important ofwhich is in recognition of the fact that it is a fantasticvehicle through which to access industry bestpractices[NRF] consistently strives to improvethe value it delivers to the membership, of which the daily electronicNRF SmartBrief is perhaps the bestand most recent example.

    Ron Hall, VPOperations,Gordmans Inc.,Omaha, NE

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    23

    NRF STRATEGIC PARTNERSHIPS

  • In June 2003, NRF launched the InternationalRetail Federation (IRF); a global division of the National Retail Federation designed to more effectively meet the needs of our growing international member base. IRF members represent an industry that registersroughly $7 trillion in sales worldwide. IRFserves the needs of retailers based outside the United States through networking events,education, services and other resources neededto achieve success in the face of todays com-petitive environment.

    FORUM FOR INTERNATIONAL RETAIL ASSOCIATION EXECS EXPANDSIRF has 35 international retail trade associa-tions as participants in their global roundtable,the Forum for International Retail AssociationExecutives. IRF welcomed the following newFIRAE members in 2003:

    =EuroHandelsinstitut e.V. Germany

    =Hellenic Retail Business Association Greece

    =European Retail Round Table Belgium

    IRF EXPANDS SERVICES TO INTERNATIONAL DELEGATIONS IN 2003

    Working collaboratively with NRF staff, IRFwas successful in adding more services targeted

    to give our international members a betterexperience at NRF events such as:

    =Simultaneous translation into Spanish,Portuguese, Chinese and Japanese for morethan 45% of educational sessions at NRFsAnnual Convention & EXPO and, for thefirst time ever, Spanish translation at NRFsLoss Prevention Conference for 40% of ses-sions at no additional cost to registrants.

    =Special registration rates for foreign delega-tions in an effort to make attendance lesscost-prohibitive for international travelers.As a result, more than 1,500 delegates repre-senting more than 50 nations from outsideof the US attended the Convention.

    =The NRF Foundation recognized Ms. Petravan Vuuren, of Van Vuuren Mode B.V,Netherlands, as the first recipient of the NRFConference Scholarship Program. This $3,000scholarship covered her full-delegate registra-tion to the NRF Annual Convention, as well astravel and hotel accommodations in New York.

    =A new International Reception at NRFs LossPrevention Conference that allowed membersof the Loss Prevention committee to meetinternational retailers and exchange informa-tion on various loss prevention issues.

    = Joint meeting of members of the MexicanRetailers Associations (ANTAD) Loss

    NRF staff and US retailers meet with theMexican retailer delegation to the NRF LossPrevention Conference in San Antonio. Fromleft to right Francisco Martn, ANTAD, TatianaTolentino, NRF, Dan Butler, NRF, Mike Keenan,Ross Stores, lvaro Osorio, ServiciosCorporativos Home Mart, Karen Knobloch,NRF, Richard Mellor, Helzberg Diamond Shops,Hugo Pablote, Por Distincin, and GabrielMontes, El Puerto de Liverpool.

    NRF LAUNCHES

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    MEM

    BERSHIP

    International Services Division

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    Prevention Committee with their peers on NRFs Loss Prevention Committees and exchanges of information on various LP issues.

    IRF AND NRF STAFF VISIT RETAILERS WORLDWIDEIN 2003

    In July, NRF staff attended the DominicanRepublics retail association Board meeting(ONEC).

    NRF staff also took time out from the 1st

    ARTS NRF Retail Standards Summit inLondon, October 1, 2003 to visit with leading UK retailers, Selfridges plc, Woolworths plc,

    J Sainsbury plc and Dixons Group plc. In addition, they also met with associations IGDand the British Retail Consortium to discusshow NRF and ARTS can collaborate with themin the coming year.

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    The reason I joined NRF was that I believe that retail in theUnited States is ahead of the rest of the world by at least fiveyears, if not more. By joining NRF, I have the chance to seewhat will be coming to Europe, prepare myself better for it and generally get good ideas which I can use for myown company.

    Sofika Eleftheroudakis,Managing Director, G.C. Eleftheroudakis S.A., Greece

    China Chain Store & Franchise Association (CCFA) delegation visit the NRF offices tomeet with Terri Dort, President of NCCR and Tatiana Tolentino, Manager ofInternational Operations for NRF.

    Left to right, Rich Gallagher, NRF Vice President and Publisher of STORES Magazine,David Martinez, President, ANTAD, Tracy Mullin, President and CEO, NRF (back row),Tatiana Tolentino, Manager, International Operations, NRF, Karen Knobloch, Senior VicePresident, Member Services, NRF, Rogelio Rodriguez, VP, ANTAD and Dave Hogan, SeniorVice President and CIO, NRF during a visit to the NRF offices in Washington, DC.

    The Forum for International Retail Association Executives, January 2003Annual Meeting.

    International Services Division

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    BOARD OF DIRECTORSThe NRF Board of Directors is the governing body that overseesthe activities of the Federation. It is comprised of leading retailchief executive officers representing the breadth and diversity of the industry. Regular meetings of the Board of Directors are held in January in New York City in conjunction with the Annual Convention & EXPO and again in the spring or early summer.NRF staff contact: Tracy Mullin

    EXECUTIVE COMMITTEENRFs Executive Committee has most of the authority of theBoard of Directors and serves as the ad hoc committee to deter-mine strategic planning and direction for the Federation. Eachmember of the Executive Committee is elected by the Board ofDirectors. The Chairman of the Board of Directors presides overthe NRF Executive Committee.NRF staff contact: Tracy Mullin

    FINANCE COMMITTEEThis committee is elected by the Board of Directors and is one of three standing committees. It oversees the finances of the Federation including reviewing and recommending theFederations budget to the Executive Committee and the Board of Directors. The committee also advises the Board on generalmatters relating to financial and accounting issues.NRF staff contact: Carleen C. Kohut

    AWARDS AND NOMINATIONS COMMITTEENRFs Awards and Nominations Committee reviews nominationsfor Directors and members, and prepares slates of nominees forconsideration by the Board and for election by the NRF member-ship. The Awards and Nominations Committee also makes recom-mendations for recipients of NRF awards and honors, includingthe NRF Gold Medal, International Retailer of the Year, RetailInnovator of the Year, Distinguished Service, American Spirit,Leadership in Public Service and the Silver Plaque Awards.NRF staff contact: Tracy Mullin

    INDEPENDENT STORES BOARDComprised exclusively of chief executives of independent mem-ber firms, members of the Independent Stores Board provideinvaluable advice to NRF in the development of programs andservices, especially in the areas of conferences and member dis-counts, to meet the needs of the smaller stores community. TheIndependent Stores Board advises the Executive Committee onmatters related to small store retailing and works closely withNRF staff to ensure that services, programs and government rep-resentation accurately address the current and future issues con-fronting independent retailers.NRF staff contact: Steve Pfister

    NRF FOUNDATION BOARD OF DIRECTORSThis Board of Directors, made up of chief executives of majorretail and supplier-partner firms, directs and oversees the pro-grams, activities and functions of the NRF Foundation, thenon-profit research and education arm of the National RetailFederation. Members are elected by the NRFF Board. NRF staff contact: Katherine Mance

    ADVISORY COM

    MITTEES NRF relies on an interactive committee structure,open to NRF members in good standing, for theformulation and execution of policies, guidelines,

    standards and strategies consistent with retailindustry objectives. The NRF committees are,without exception, designed to be representativeof the industry and reflect its breadth and diversi-ty. They are comprised of industry specialists intheir individual fields who give generously oftheir time and knowledge to set policy and helpdevelop positions on important retail operationsor public policy issues which will benefit theindustry at large.

    Existing for the purpose of advancing the retailindustry, NRF councils and committees mayengage in a number of activities, including:

    = Information exchange

    = Setting of public policy positions

    = Research

    = Benchmarking

    = Product development

    = Shared opportunities for purchase of services

    = Presentation of testimony

    = Standards setting

    = Publishing

    ADA TASK FORCEA group comprised of NRF retail members inter-ested in the Americans with Disabilities Act andany resulting or pending federal regulations or litigation.NRF staff contact: Mallory B. Duncan

    ASSOCIATION FOR RETAIL TECHNOLOGY STANDARDS(ARTS) CONSORTIUM EUROPEARTS Consortium Europe is the formal organiza-tion of ARTS European members to support stan-dards development by organizing committees toenhance the Data Model and develop XML docu-ments and messages. This work supplements theefforts of similar US based committees.ARTS staff contact: Richard E. Mader

    CFA PRODUCT REGISTRATION COMMITTEEThe committee was set up in response to a petitionfrom the Consumer Federation of America (CFA) tothe Consumer Product Safety Commission (CPSC)that retailers, manufacturers and distributors berequired to collect and house consumer contactinformation on products sold for a period of 20years via a pre-paid mail back postcard. Theintent of the cards is to provide accurate informa-tion in the event of a recall. All NRF members arewelcome to join. NRF staff contact: Elizabeth Treanor

    BOARD OF DIRECTORS& STANDING COMMITTEES

    ADVISORY BOARDS, COUNCILS, AND COMMITTEES

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    27

    CIO COUNCILAn invitation-only committee made up ofretailings most prominent chief informationofficers. It meets in winter, spring and sum-mer to discuss issues of common interest,promising technologies, and to take a proac-tive stance on creating new technology envi-ronments. It provides a valuable opportunityfor peers to share ideas and experiences, andin doing so helps guide the National RetailFederation technical staff to create new projects that reflect the industrys needs.NRF staff contact: David Hogan

    COMMITTEE ON EMPLOYMENT LAWThis committee serves as NRFs technicalcommittee on labor law and employee rela-tions matters, and is comprised of retailindustry corporate executives and independ-ent labor counsel, as well as human resourceand employee relations executives from NRFmember companies and associations. Eachyear, the CEL files amicus curiae briefs inhigh profile cases pending before the NLRBand federal courts.NRF staff contact: Katherine Lugar

    COUNCIL ON DIVERSITYThe NRF Council on Diversity leverages theknowledge and expertise of its members toinfluence the direction of diversity practiceswithin the retail industry. Such practices notonly serve an important moral cause but alsohave a profound impact on the growth andprosperity of the business. The Council edu-cates the industry, media, public interestgroups and the general public regarding the multiple benefits of a formal diversityawareness program.NRF staff contact: Dan Butler

    CREDIT EXECUTIVES COMMITTEEThis committee provides NRF with strategicand operational advice related to consumercredit issues, including federal legislative andregulatory policy, the standardized creditbureau reporting format, as well as fileintegrity among retail credit grantors. Thisgroup of senior credit executives meets atleast twice a year.NRF staff contact: Mallory B. Duncan

    CREDIT BANKRUPTCY WORKING GROUPA subcommittee of NRFs Credit ExecutivesCommittee, this group focuses on legislative,regulatory and other solutions to combat rising consumer bankruptcies.NRF staff contacts: Mallory B. Duncan /Katherine Lugar

    CRM RETAIL IDEA EXCHANGE The group discusses issues and concernsrelated to implementing CustomerRelationship Management (CRM) initiativesin their companies. Comprised of large andsmall retailers, the group focuses on the inte-gration of technology, marketing, operationsand strategy in the retail environment todrive sales and profitability. The group alsocontributes educational content for NRFsCRMretail conference.NRF staff contact: Dan Butler

    DATA MODEL COMMITTEE (ARTS)This committee shapes the future of theARTS Data Model. They propose enhance-ments, prioritize activities and approve allchanges to the Model.ARTS staff contact: Richard E. Mader

    DIGITAL ASSET MANAGEMENT COMMITTEE (ARTS)This committee reports to the CIO Council andfocuses on improvements in image metadatamanagement, including identification method-ology and transport guidelines for merchan-dise information (images and product descrip-tions) used in multiple-channel retailing. Thiscommittee is open to NRF retailer and manu-facturer members that are responsible for themanagement of merchandise data in their catalog, Web or brick-and-mortar stores.NRF staff contact: Germaine Palangdao

    E-COMMERCE POLICY WORKING GROUPThis committee is made up of policy, legal,and IT experts from retail companies with apresence on the Internet. The group addressese-commerce issues from a policy perspectiveas they affect retailers in the fast-paced worldof e-tailing.NRF staff contact: Elizabeth Treanor

    ELECTRONICS RECYCLING WORKING GROUP This working group is for retailers interestedin developing and advancing an industryposition on electronics recycling. Severalstate legislatures have begun to move towardrequiring some form of electronics productrecycling typically paid for with an advancedfee collected at point of sale. A federal billhas also been introduced requiring fees andrecycling for computers. All NRF membersare welcome to join this committee.NRF staff contact: Elizabeth Treanor

    ENVIRONMENTAL COMMITTEEThe committee works to formulate industrypositions and responses to address the variousproduct stewardship initiatives and environ-mental sourcing protests that are now on therise. While many NRF member companies haveundertaken various environmental initiativesindependently, our hope is to provide a coordi-nated retail response to ecological criticisms.NRF staff contact: Elizabeth Treanor

    FINANCIAL EXECUTIVES COUNCILThis Council, comprised principally of ChiefFinancial Officers of member firms, represents allsegments of the retail industry. Members focuson business strategies and monitor retail industryfinancial services activities, with special attentiondevoted to tax and accounting issues. This groupalso provides important input into the develop-ment of program content for key NRF confer-ences and other educational programs.NRF staff contact: Carleen C. Kohut

    FORUM FOR INTERNATIONAL RETAIL ASSOCIATION EXECUTIVESThe FIRAE seeks to promote the free exchangeof information among national retail tradeassociations around the world and works toidentify opportunities for cooperation inresearch and education. The FIRAE has mem-bers in Asia, Europe, South America and NorthAmerica; membership is open to all nationalretail associations outside the United States.NRF staff contact: Tatiana Tolentino

    GENERAL COUNSELS FORUMThis invitation-only council is limited to themost senior legal officers among NRFs retailmembership. Two to three times each year theymeet to share strategy and ideas for addressingcutting edge legal and management issues ofconcern to retail law departments, such as alter-native dispute resolution, antitrust trends,advertising, benchmarking of legal programs andsecurities law issues, as well as other matters.NRF staff contact: Mallory B. Duncan

    GOVERNMENT AFFAIRS POLICY COUNCILThe NRF Government Affairs Policy Council isthe Federations principal policy-making bodyon federal legislative and regulatory issues.Receiving input from other NRF technicalcommittees, the Policy Council reviews pend-ing and proposed legislation and regulationand sets official policy positions as well asimplementing strategies and tactics. This invi-tation-only council is comprised of corporaterepresentatives as well as state and nationalassociation executives.NRF staff contact: Katherine Lugar

    National Retail Federation

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    LOSS PREVENTION ADVISORY COUNCILThis council meets frequently to discusscommon problems confronting the securityindustry and to share new ideas on productand program results. The council is alsoactive in the planning of the Loss PreventionConference and Exhibition. The council wasinstrumental in the development of a newseries of informational brochures on a vari-ety of loss prevention topics to benefitsmaller retail companies.NRF staff contact: Dan Butler

    LOSS PREVENTION WOMEN IN LOSSPREVENTION CAUCUSThis subcommittee of the Loss PreventionAdvisory Council meets annually and byconference call quarterly to discuss theissues that women face in advancing theircareers in retail loss prevention. The groupis open to female executives in the loss prevention division of retail companies. NRF Staff Contact: Denise Brass

    NATIONAL INVESTIGATORS NETWORK The Network meets annually and hostsquarterly conference calls. This group allows retail investigators to network witheach other on critical issues and cases at local, regional and national levels.Comprised of corporate executives with primary responsibility for investigation of major cases for retailers.NRF staff contact: Dan Butler

    ORGANIZED RETAIL CRIME/THEFT TASK FORCE The task force meets as needed to discusslegislative remedies to this growing problem.In addition, the task force compiles statisticsand anecdotal information as background.NRF staff contact: Elizabeth Treanor

    POSTAL WORKING GROUPThis working group provides guidance toNRF in representing retailers on mattersbefore Capitol Hill, the Postal RateCommission and the United States PostalService. The committees primary focus isfirst-class mail. The committee also providestestimony on proposed federal legislationwhich affects mailers generally. The commit-tee meets on an ad hoc basis.NRF staff contact: Chad Davis

    ITAC CUSTOMS SUBCOMMITTEEThis subcommittee of the ITAC providesguidance and technical expertise on customsand trade facilitation issues affecting retail-ers as well as relations between the Bureauof Customs and Border Protection and theimporting community. The subcommitteeconfers on an ad hoc basis.NRF staff contact: Erik Autor

    ITAC SUPPLIER COMPLIANCE SUBCOMMITTEEThis subcommittee of the ITAC formulatesthe industrys response to concerns raisedabout sweat shop working conditions inU.S. and international manufacturing opera-tions. In 2003, the subcommittee and an eth-ical sourcing taskforce worked at the NRFboard direction on a retail industry ethicalsourcing initiative to better coordinateefforts to ensure that retail suppliers adhereto recognized labor norms for their work-force. The subcommittee confers on an adhoc basis.NRF staff contact: Erik Autor

    ITAC TRANSPORTATION LOGISTICS ANDSUPPLY CHAIN SECURITY SUBCOMMITTEEThis subcommittee of the ITAC providesguidance and technical expertise on issuesaffecting retailers management and securityof their international supply chains and isalso a working group of the NRF LossPrevention Committee. The subcommitteeconfers on an ad hoc basis.NRF staff contact: Erik Autor

    ITAC TRADE REMEDIES SUBCOMMITTEEThis subcommittee of the ITAC providesguidance and technical and legal expertiseon antidumping, countervailing duty, safe-guards, as well as other trade remediesactions affecting consumer goods. The sub-committee confers on an ad hoc basis.NRF staff contact: Erik Autor

    IXRETAIL TECHNICAL COMMITTEE (ARTS)The IXRetail Technical Committee developsXML documents and messages for use withinthe retail enterprise. It is composed of XMLexperts from both vendors and retailers.ARTS staff contact: Richard E. Mader

    HEALTH & EMPLOYEE BENEFITS COMMITTEEThis committee consists of senior-level retailbenefits executives who provide technicalinput on a wide range of health and otherbenefit issues. The committee meets on anad hoc basis as needed.NRF staff contact: Katherine Lugar

    HUMAN RESOURCES SPECIALTY STOREROUNDTABLEThis committee is concerned with organiza-tional issues in field operations and compen-sation and benefit considerations for specialtystore chains. It conducts an annual SpecialtyStore Compensation and Benefit Survey forthe retail industry. NRF staff contact: Dan Butler

    INTERNATIONAL TRADE ADVISORY COMMITTEE (ITAC)The ITAC members include senior retailsourcing, compliance, and government rela-tions executives and general counsels whoare responsible for international trade, cus-toms, and international labor issues for theircompanies both on the legislative and regu-latory fronts. In 2003, the ITAC played a keyrole in representing the industrys interestsin eliminating U.S. and foreign trade barriersand facilitating trade. The ITAC meets twotimes a year and confers monthly by confer-ence call. It has five subcommittees toaddress specific issues.NRF staff contact: Erik Autor

    ITAC SOFTGOODS SUBCOMMITTEEThis subcommittee of the ITAC providesguidance and technical expertise on tradeissues that specifically affect textiles andapparel. The subcommittee confers on an adhoc basis.NRF staff contact: Erik Autor

    ITAC HARDGOODS SUBCOMMITTEEThis subcommittee of the ITAC providesguidance and technical expertise on tradeissues that specifically affect consumer prod-ucts other than textiles and apparel. Thesubcommittee confers on an ad hoc basis.NRF staff contact: Erik Autor

    ADVISORY BOARDS, COUNCILS, AND COMMITTEES (continued)

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    29

    TAX ALTERNATIVE TAX SYSTEMS TASK FORCEA task force of the Taxation Committee andPolicy Council, this group is comprised of senior retail tax and governmental affairs executives and economists from major retailcompanies who have specific interest in con-sumption taxes. The Task Force is responsiblefor initiating and producing research relatedto tax reform and its impact on retailing anddisseminating the results in appropriate forums.NRF staff contact: Steve Pfister

    TAX LCM WORKING GROUPThis subcommittee reports to the TaxationCommittee. Members utilize the Lower ofCost or Market accounting mechanism andwork to educate lawmakers about its impor-tance to retailers and consumers. Attemptshave been made in recent years to eliminatethis GAAP account practice for federal revenue reasons.NRF staff contacts: Steve Pfister / Chad Davis

    TAX TAX REFORM WORKING GROUPThis is a subcommittee of the TaxationCommittee. Its primary purpose is to evaluateand educate retailers, lawmakers and con-sumers of consequences associated with majornational tax reform proposals, including a flattax or national retail sales tax (NRST). It hascommissioned a multi-year study of leadingreform proposals and utilizes these results tohighlight the ramifications of a NRST on theeconomy and consumers.NRF staff contacts: Steve Pfister / Chad Davis

    TAX TENANT CONSTRUCTION ALLOWANCEThis subcommittee reports to the TaxationCommittee. It focuses on legislative and regu-latory activism in an effort to provide a clari-fication of tax treatment of both tenant andconstruction allowances (inducements) pro-vided to retailers by owners and developers.NRF staff contacts: Steve Pfister / Chad Davis

    TAX WOTC WORKING GROUPThis ad hoc committee is comprised of corpo-rate Work Opportunity Tax Credits (WOTC)administrators and meets by conference callto discuss specific program procedures andupdates when necessary.NRF staff contacts: Steve Pfister / Chad Davis

    UNIFIEDPOS TECHNICAL COMMITTEE (ARTS)The Committee enhances and maintains theTechnical Specification, the foundation forboth JavaPOS and OPOS.ARTS staff contact: Richard E. Mader

    RISK MANAGEMENT & CONTROL EXECUTIVESADVISORY COUNCILIn addition to planning the annual RiskManagement and Control ExecutivesConference, this council conducts forums forthe exchange of ideas and solutions to indus-try risk and audit concerns. This groups mis-sion is to enhance the risk management andcontrol practices within the industry by pro-viding training and development on emerg-ing issues and to exchange informationthrough a healthy network of professionals.In addition, the Council endeavors to ensureappropriate knowledge, tools and techniquesare introduced in the retail industry withrespect to risk management, internal auditand compliance practices within membercompanies. The Council is comprised of individuals responsible for internal audit,risk management and compliance and mayinclude such job titles as Chief AuditExecutive, Chief Risk Officer and ComplianceOfficer. Representatives from the publicaccounting firms actively participate as members of this council.NRF staff contact: Dan Butler

    STRATEGIC SUPPLY CHAIN COUNCILThis new Council is comprised of retailers,research firms, and software application sup-pliers. The mission of the Council is toaddress emerging supply and demand chaintrends, to identify retail requirements, and toeducate all three distinct communities onbest practices, efficiencies and opportunities. NRF staff contact: Dave Hogan

    TAXATION COMMITTEEThe Taxation Committee provides seniorretail tax executives a forum to discussindustry-related tax issues and serves as aninvaluable information and networkingresource. The Committee meets three times ayear to discuss issues affecting the industryand advises NRF on emerging tax legislationand regulations likely to affect retailers, theirbusinesses, and their customers. Briefingsand discussions focus on Federal legislation,regulations, audit issues, and state and localtax matters. The Committee develops legisla-tion, submits testimony, and provides wit-nesses to represent industry concerns beforeCongress, Treasury, and the IRS. It also pro-duces publications and memorandums oncurrent retail tax issues.NRF staff contacts: Steve Pfister / Chad Davis

    PRODUCT SAFETY COMMITTEEThis committee effectively communicatesexisting and potential product safety prob-lems within the retail industry and addressesemerging product safety issues by providingsubstantive and strategic input into thedevelopment of industry public policy. Inaddition, the committee provides commentson proposed regulations before the ConsumerProduct Safety Commission and communi-cates the industrys position on key issues. NRF staff contact: Chad Davis

    RETAIL PRIVACY COMMITTEEThe Retail Privacy Committee is composed ofsenior retail representatives with responsibil-ity for aspects of company operations thataffect customer and employee privacy. Due tothe breadth of the subject, it is intended tobe a cross-functional committee. Most com-panies have more than one representative onthe Committee to ensure their marketing,information systems, human resource, opera-tions and loss prevention interests are repre-sented. Government and public interestgroup initiatives that could restrict retailersuse and reuse of personal data, either directlyor through limitations on access to creditbureaus, mailing lists, demographic files orother sources fall within the purview of thecommittee. The committee meets on a regularbasis.NRF staff contacts: Mallory B. Duncan /Elizabeth Treanor

    RETAILERS WORK-LIFE FORUM The forum meets to examine the challengesof the hourly employee that prevent themfrom being able to fulfill their work sched-ule. This creative and unique group examinessuch important issues as child care, elder careand financial planning initiatives that willgive the hourly employee assistance in solv-ing the problems that prevent them fromworking their schedule. This group works toencourage research and to consider legislativeactions in the Work-Life arena. NRF staff contact: Dan Butler

    National Retail Federation

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    Helping Retailers Improve their Internetand Multichannel Retail BusinessAccording to Shop.orgs premier annual indus-try study, State of Retailing Online 6.0, onlinespending in 2003 is expected to approach the$100 billion mark, a 26 percent increase com-pared to 2002.

    As the industry grew in 2003, so too didShop.org. Shop.org saw a second year in a rowof significant growth in its membership, eventattendance and its stature as the authority inretailing online. As NRFs online group, almost300 leading companies are part of the Shop.orgcommunity where they enjoy a non-commercialforum for the exchange of information, lessons-learned and expertise.

    HIGHLIGHTS FROM 2003 INCLUDE:=As of November 2003, Shop.org membership

    is on pace to grow 40 percent for the year.Shop.orgs membership represents the lead-ers in the industry and includes 8 of the Top10 Specialty Retailers (STORES Magazine,August 2003).

    =Shop.org released the 6th version of its annu-al State of Retailing Online research studyconducted in partnership with ForresterResearch. The study is based on confidentialfinancial data provided by more than 130companies. Media coverage included TheWall Street Journal, The New York Times,CNN, and many other business and tradepublications.

    =Shop.org conducted its annual eHolidayMood Study. The study included bi-weeklysurveys of more than 100 retailers inNovember and December and allowed retailers to benchmark their Internet and

    multichannel retail performance during thecritical holiday season.

    =The Shop.org Annual Summit attracted morethan 750 interactive retail executives whogathered to network, shareinformation and hearkeynote speakers such asDell, Inc. Chairman and CEOMichael Dell and SearsChairman, President andCEO Alan Lacy.

    =Shop.org held two retailer-only 1.5 day workshops:=Best Practices in Online

    Marketing, Miami,Florida

    =Best Practices in Online MerchandisingWorkshop, Sonoma, California

    NRF DIVISION

    S

    Office Depot participates in Shop.org because it provides terrificnetworking opportunities with Best in Class eRetailers, up to dateeCommerce marketplace metrics and informational seminars. Itsan important resource for anyone in eBusiness.

    Monica Luechtefeld, Executive Vice President, E-Commerce, Office Depot

    ... the annual Shop.org study an authoritative barometer ofthe state of Internet shopping The Wall Street Journal

    Alan Lacy, Chairman andCEO, Sears, Roebuck andCo., shares informationabout the relaunch ofSears.com.

    Michael Dell, Chairman,Dell Corporation, talksabout the future of thecomputer in an era oftechnology convergence.

    Elaine Rubin, SVP, Strategy& Business Development, 1-800-FLOWERS.com, Inc.,addresses the crowd.

    SHOP.ORG MISSIONShop.orgs mission is to help the memberssignificantly improve their multichannel retail capabilities by addressing the evolvingopportunities and issues related to theInternet and integration with other channels.

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    Providing Key Connections For RetailMarketing ProsThe Retail Advertising & MarketingAssociation (RAMA) is a trade association ofretail marketing and advertising professionals,plus their counterparts on the agency, mediaand service-provider sides of the business.RAMA is a division of NRF.

    RAMA is the producer of the world-famousRetail Advertising Conference (RAC), the largestsingle gathering of retail marketing and adver-tising executives in the industry today. The 51stannual Retail Advertising Conference was heldat the Chicago Hilton, February 5-7, 2003. Morethan 900 professionals were in attendance.

    RAMA also is sponsor of the RAC AwardsCompetition, the industrys most prestigious

    creative contest for retail broadcast and printadvertising.

    RAMA connects retail marketing and adver-tising professionals with their peers. Throughthe Retail Advertising Conference (RAC), work-shops and other events, RAMA members inter-act with their colleagues in the field, sharinginsights and experiences. RAMA also bringstogether members with leading experts ontimely issues of relevance to the industry.

    RAMA connects in-house retail marketingpros with their counterparts in the agency andbusiness partner realm.

    RAMA continues to provide value to their membership through partnerships andresearch with BIGresearch. The CIA (ConsumerIntentions and Actions Survey), is a valuableproduct that RAMA members get free eachmonth and can subscribe to the full service at a discount.

    RAMAs Board of Directors and ExecutiveCommittee continue to provide guidance andsupport that helps make RAMA and RAC theleaders in retail marketing. RAMAs Board ismade up of over 50 senior marketing profes-sionals and is representative of the RAMAmembership including retailers, media companies, advertising agencies, consultantsand more. RAMAs Executive Committeeincludes 12 senior retail marketing executivesfrom leading retail companies including Wal-Mart, Carson Pirie Scott, Linens N Things,Toys R Us, Target, The Home Depot, J.C. Penney, Kohls, Lands End, Best Buy,Mervyns, Macys West and more.

    31

    Brad Davis, Executive Vice President, Marketing, WashingtonMutual Bank, shares his thoughts on creativity and leadershipwith the RAC audience.

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    Helping Members Achieve SuccessThe National Council of Chain Restaurants(NCCR) is comprised of nearly 40 of the largestchain restaurants in the United States. Throughthe last four decades, NCCR has harnessed thepower of the industry to advance sound publicpolicy that helps its members achieve success,create jobs, and grow.

    Unlike many trade associations, NCCR focus-es on the big issues without big bureaucracy.In 2003, NCCR vigorously pursued the indus-trys interests in policy areas including:

    =Wage and Benefits Policy

    =The Work Opportunity Tax Credit

    =Health Care Reform

    = Immigration Laws

    =Obesity and frivolous lawsuits

    This year NCCR filed amicus (friend of thecourt) briefs in two U.S.Supreme Court cases ofgreat significance to chain restaurant companies.

    The first case, Green Tree Financial Corp. v.Bazzle, involved the issue of class action proce-dures in arbitration proceedings where the arbi-tration agreement does not address class actionremedies. NCCR urged the Supreme Court not toallow class action remedies to be read into anarbitration agreement that is otherwise silent onthe issue. The Court ruled that arbitrators mustdecide this issue in each case. The second case,Breuer v. Jims Concrete of Brevard, resolvedthe issue of whether employers have a right toremove to federal court cases involving mini-mum wage and overtime claims under federallaw that were filed against them in state courts.Most employers would prefer that such lawsuitsbe heard in federal court, and the SupremeCourt confirmed that employers can choose fed-

    eral court, notwithstanding a plaintiffs initialchoice to file in state court.

    NCCR is proud of its amicus curiae contribu-tions in both of these member company favor-able Supreme Court decisions.

    ARTS Sets New Standard of Success

    The Association for Retail TechnologyStandards (ARTS), the standards division of theNational Retail Federation, achieved newheights in service to the industry, releasingnumerous products in 2003 and raising its pro-file in the world of IT standards. Many retail-ers and their vendors saved IT dollars andexpanded their options for future change byimplementing ARTS standards. As a cleardemonstration of the value that retailers find inthe standards, ARTS was pleased to welcomenew members such as Borders Group (US),Harrods Limited (UK), HollywoodEntertainment Corporation (US), LibrerasGandhi (Mexico), Manor AG (Switzerland),

    Dick Crawford, Vice President,GovernmentRelations, McDonalds,left, with Nick Zuk,Assistant Secretaryand CorporateCounsel, White Castleand Chairman, NCCRat a dinner during the NCCR AnnualMeeting sponsored by Coca Cola.

    A full house at the ARTS NRFRetail Standards Summit in

    London, UK, September 2003.

    NRF DIVISIONS

    ARTS Consultant Richard Halter inJapan to conduct training in the

    POSlog schema so that ARTS stan-dards can be transmitted to a wider

    market, October 2003.

  • Office Depot (US), Sobeys Inc. (Canada) andToys R Us Inc. (US).

    At the NRF 92nd Annual Convention, Smartand Final Inc. and KB Toys made presentationson how their successful implementations of theARTS Data Model and the new XML POSlogschema provided a more stable and flexiblePOS environment as well as better service totheir customers. The ARTS Standards Pavilionon the main exhibit floor showcased the powerand flexibility of standards-based applicationsby 360Commerce, afterBot, Cyberdata, IBM,Microsoft, NCR, Retek, Sun Microsystems,Triversity, Ultimate Technology and WincorNixdorf with real-time demonstrations of ARTSstandards at work.

    ARTS 2003 ACCOMPLISHMENTS: Version 4.0 of the ARTS Data Model, the firstversion capable of supporting the reportingfunctions multi-store corporate enterprise, was released in March. This version greatlyexpanded the utility of the Model as the prin-cipal data design for new applications. Britishdepartment store chain House of Fraser plc andvideo retailer Hollywood EntertainmentCorporation are new users. In addition, severalvendors such as IBM Corporation and NCRCorporation have already enrolled in the DataModel conformance testing program.

    IXRetail, the ARTS committee that builds onthe ARTS Data Model to develop XML schemasand message sets for application-to-applicationintegration, doubled the number of schemasavailable to the public, releasing three newXML schemas in 2003: Digital Asset

    Management, to com-municate imagesbetween retailers andsuppliers; StoredValue, to integrate

    Gift Certificate and Loyalty programs to POS;and Remote Equipment Monitoring and Control(REMC), to manage field equipment remotelyto increase up-time, thus minimizing servicedisruption to customers. Perhaps the most sig-nificant IXRetail accomplishment was therelease of POSlog version 2. POSlog captures allthe data from the POS application for use in allassociated applications and has already beenadopted by 360Commerce, Datavantage, IBM,ISS, NCR, Triversity and Unipower Solutions.

    The UnifiedPOS committee released version1.8 of the ARTS standard for connectingperipheral devices to Point of Sale (POS) sys-tems that are application independent, allowingretailers to select best-of-breed devices frommultiple vendors. This release includes two newimportant functions, connection of smartcardreaders and reporting of device statistics.

    OTHER NEWS AND EVENTS:ARTS and NRF took a major step in interna-tionalizing our services in October, 2003, hold-ing the Retail Standards Summit in London.This one-day educational event was co-hostedby ARTS and NRF, attracting a large audienceof CIOs and Managers responsible for imple-menting IT applications at the corporate level.Reebok and Wal-Mart presentations wereamong the highlights of the Summit.

    ARTS and the NRF CIO Council initiated theirfirst joint project in 2003, the development ofstandard Requests for Proposal (RFP). By consoli-dating the best of many retailers RFPs into onedocument, the Joint Committee is developingstandard RFPs to guide retailer selection of manyapplications. The first standard RFP for POS wasreleased in November and is being used by sev-eral retailers to select the best for their businessand helping them reduce the risk of overlookingcritical functions or contract conditions.

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    NATIONAL RETAIL FEDERATION

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    PLANS FOR 2004:ARTS and NRF intend to capitalize on the success of the London Retail Standards Summitby continuing to promote international expansion through international events and bycooperating with other standards groups. ARTS will also continue to develop the multi-store functions of the Data Model and will begin work on new standard RFPs at therequest of ARTS and NRF members.

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    NRF Foundation Builds CareerCurrency for a High Growth Industry

    Again this year, NRF Foundation marked newmilestones as it built on previous efforts to pro-vide programs and tools to develop a knowl-edgeable, professional, committed next genera-tion of retailers. Highlights of the year include:

    AN UNPRECEDENTED LINKAGEUnder a new $2.8 million grant from the U.S.Department of Labor, the NRF Foundation continues to build career currency for retailworkers and to enhance their value for employ-ers. The effort builds on work previouslyundertaken in developing and expanding theuse of Retail Skills Centers and related educa-tion and training, as well as certification cre-dentials. In addition, the grant allows NRFF towork directly with retailers to create industrytools and learning that will benefit the industryand demonstrate cross-industry opportunities.

    NRFF is exploring new locations for RetailSkills Centers across the country in partnershipwith a growing list of major shopping centerdevelopers, including Westfield, Kravco, Mills,Glimcher, Willmorite, and General GrowthProperties. These developers recognize thatcenters have become valuable resources fortheir tenants. As part of the grant proposal,NRFF will designate a minimum of 6 regionalhubs to serve as demonstration sites andlearning laboratories.

    Where possible, Skills Centers will be co-located or linked with national workforce sys-tem One-Stop career centers to increase accessand potential for the public employment andtraining system to serve retail companies. By working with the public system, NRFFhopes to make retail the recommended indus-try of choice for job services recruiters andcounselors, and to equip trainers with pro-grams that encourage and prepare workers for retail careers.

    This year, existing Retail Skills Centers con-tinue to expand programs and outreach, addingnew training offerings, more job fairs, cus-tomized training program and placement servicesto retailers and other employers. Funding to sup-port these efforts came from local, regional andstate governments, foundations and corporations,retailers and local business partners.

    CERTIFYING TOMORROWS LEADERSNearly 250 high school students (and a numberof teachers) took the NRF FoundationsProfessional Customer Service CertificationAssessment as part of career education eventsat the April 2003 International DECAConference. CVS Pharmacy, Finish Line and theFlorida Retail Federation sponsored this inau-gural testing event. The passing rate was excel-lent and for good reason.

    This segment of high school and college stu-dents a major portion of the front-line retailworkforce learns specific professional andcareer skills as part of their academic prepara-tion. NRF Foundations Customer Service &Sales Skills Standards, developed by retailers,are integrated into Marketing Education/DECAcurriculum, providing a basis for students topass the NRF Foundations ProfessionalCustomer Service Certification Assessment.

    NRFF continues to build new relationshipswith student associations, school systems andcolleges and universities, like its longstanding

    NRF FOUN

    DATION

    NRF Foundations new and improved Retail Careers and Advancementwebsite serves as a resource for students and others seeking to pur-sue retail as a career, providing information on skills and educationnecessary, diversity of career options, an online job bank throughNRFF partner CareerBuilder,com, and much more. Retailers linkingtheir career websites can position their companies for considerationas employers.

    Applicants whosuccessfully complete the

    assessment in Professional CustomerService can apply for national certification and

    receive a certificate and lapel pin to document thatthey have achieved the industrys only prestigious

    recognition for excellence in customer service.

  • partnership with DECA, at the national, state,and local levels to promote employer-driven edu-cation and credentials. These partners, broughttogether with retail human resource and recruit-ing executives through NRF Foundations newEducation and Advancement Committee, willcontinue to create and implement programs thatdrive student awareness of diverse and reward-ing career opportunities in retail and acquisitionof necessary skills to ensure their success inthose careers.

    TAKING CAREERS TO THE KIDSThe NRF Foundation completed a major revampof its website, www.nrf.com/foundation, inAugust, and now provides retailers user friendly,one-stop shopping for education and trainingproducts and services. A special section of thewebsite, www.nrf/retailcareers.com, is particu-larly worthy of note. Designed to appeal prima-rily to high school and college students, thesite features interactive activities, all of whicheducate users about retail as an industry, as aneconomic force, and as a great place to find achallenging career. Profiles of current success-ful retailers career paths provide informationon the diversity of opportunities in retail andinteresting and sometimes highly non-tradi-tional ways careers have unfolded.

    Participating retailers career websites andeducational institutions sites are linked, offeringyoung visitors an opportunity to compare work-ing for various companies, or to pursue post-secondary education, specifically in retail.Projects designed by NRF Foundation staff andcoordinated through outreach to colleges andhigh schools, drives students into those sites,offering maximum visibility for linked retailers orcolleges with a generation making a career choice.

    The new site has increased NRFFs abilityto position retailing as a career destinationrather than only a place to find short-termjobs. Indeed, through a partnership withCareerBuilder.com, visitors to the sitecan immediately link to the site and pur-sue positions in retail at many levels.Traffic to the site continues to grow weekly,and new and creative means will continueto be employed to build interest in retailfor life among young people.

    SHARING INDUSTRY INFORMATIONFulfilling its mission to provide timely researchon industry trends and practices, NRFFoundation this year released the inauguraledition of Retail Horizons: Benchmarks2002, Forecasts 2003 at NRFs AnnualConvention in January. This comprehensivestate of the industry report, created in partner-ship with BearingPoint (formerly KPMGConsulting) revealed key information in eightareas of retail operations. A second survey wasfielded in July and, with more than one hun-dred retailers furnishing information throughan expanded survey, the 2003-2004 edition issure to become a must-have for retailers, ana-lysts and industry business partners. It will bereleased once again at the NRF AnnualConvention in January 2004.American Express and NRF Foundation

    partnered this year to produce CustomerService Excellence 2004, selecting theSouthwest RetailCenter for Educationand Research,University of Arizonato conduct the studyon their behalf.

    35A group of students completing thePhiladelphia Youth Network WorkReady pro-gram, developed by staff of NRF Foundationand the Retail Skills Center at King ofPrussia, for the Philadelphia WorkforceInvestment Board Youth Council, look pleasedwith themselves on completing their studies.

    Job fairs are only one of themany benefits to retailersfortunate to have a RetailSkills Center in their geo-graphic area. Here retailersat Jersey Gardens have theopportunity to interviewtalent recruits and, in some instances, trained byRSC personnel.

    The second annual BIGSilent Auction, held dur-ing the NRF Conventionand EXPO, realized pro-ceeds of $91,000 to helpunderwrite expansion ofNRF Foundation careerdevelopment programs.Nearly 90 retailers, busi-ness partners andFoundation friends con-tributed items for auc-tion and others werewilling bidders.

    Students receiving the highest score on the nationalassessment in Professional Customer Service during theDECA national conference were awarded $500 scholar-ships, courtesy of The Finish Line. Pictured, l-r: ShanaMack, NRF Foundation; Destree Hafeman, Preble H.S.,Wisconsin; Jenny Werwie, Bradford H.S., Wisconsin; andJeff Koehne, Sr. Recruiter and Trainer, The Finish Line.

    Personal attention andcoaching are key to the

    success of recruitment andtraining programs at theNRF Foundation-affiliated

    Retail Skills Centers.

    NATIONAL RETAIL FEDERATION

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  • 36

    In a competitive industry, being on top of the latesttrends, hottest ideas and consumer attitudes is necessaryto achieve success. STORES Magazine, NRFs monthlymagazine, offers an insiders view of the retail industry.

    Insightful articles, worldwide coverage of retailing, andbuying guides with the latest products and services arejust some of benefits that come with a STORES subscrip-tion. The STORES Magazine Top 100 Retailers earnscoverage in the nations leading newspapers, and STORESspokespeople frequently offer their insights about theindustry in the mainstream national media.

    In 2003, STORES launched LP and Security Trends, a bi-monthly magazine presenting integral information onloss prevention and security operations. In November,STORES released the first annual Consumer Credit Survey, adetailed analysis of how shoppers use their credit cards.With more options to complete a purchase than everbefore, this groundbreaking study examines the thoughtpatterns behind consumers credit behavior.

    STORES continues to publish the yearly RetailIndustry Buying Guide and Software Sourcebook,helping retailers of all sizes and in all industry segmentsfind the products, services, and software applicationsneeded to run a successful enterprise.

    STORES also publishes the Retail Deals e-newsletter, abi-weekly publication that keeps retailers and product andservice providers abreast of the latest IT developments,including new hardware and software applications, retailimplementations worldwide, personnel changes, and otherimportant retail IT information.

    STORES Online (www.stores.org) serves as a valuableresource for retail industry professionals and offers anindustry calendar and other important and timely infor-mation. During 2003, STORES maintained its No. 1 position

    as the best-read and best-rated magazine for seniorretail executives in all industry segments.

    MAG

    AZINE

    STORES Readers Get the Inside Scoopon the Retail Industry

    THE BEST READ AND BEST RATEDMAGAZINE FOR SENIOR

    RETAIL EXECUTIVES

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    YourDues $Hard atWork:

    NRF members receive morethan $3 in products and

    services for every $1 of duespaid. STORES magazine,

    Retails BIG Show and otherNRF conferences provide

    significant resourcesto underwrite NRF member benefits.

    F INANC IALSSource of Funds

    Use of Funds

    MemberDues21%

    Non-DuesRevenues79%

    RevenueProducingPrograms39%

    MemberPrograms61%

  • 325 7th Street, NWSuite 1100Washington, DC 20004(202) 783-7971Fax: (202) 737-2849www.nrf.com