NRF Annual Report 2009 by Prographics Inc

THE COURAGE TO LEAD 2009 ANNUAL REPORT

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

Mission Statement NRF’s mission is to advance and protect the interests of the retail industry and to help retailers achieve excellence in all areas of their business. The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations.

Chairman’s Message

’ve been proud to serve as chairman of NRF during the last two years to help lead our industry’s response to the formidable economic and other challenges we all face as retailers. Whether through NRF’s aggressive posture on Capitol Hill as a leading advocacy group or through its

educational conferences, webinars, training, research, and vibrant committees, NRF has worked hard to make a difference in the businesses of our members. Of course, the single biggest concern facing retailers has been the economic downturn. With consumer spending representing two-thirds of GDP, NRF argues on Capitol Hill that it would be difficult to see an economic recovery that was not accompanied by an increase in consumer spending. Congress and President Obama responded by passing an economic stimulus bill that

included both payroll tax credits intended to get Americans spending again and massive infrastructure programs that put money into workers’ pockets and simultaneously improved roads and highways essential to the retail supply chain. NRF also called for steps to make credit more freely available and helped pass tax legislation that brought billions of dollars in “carryback” refunds to retailers in time to fully stock and staff stores for the holiday season. NRF member retail CEOs had a number of face-to-face meetings with Washington lawmakers to warn of the dangers of employer mandates in health care reform legislation and the pro-union Employee Free Choice Act – both measures that could chill job creation at a time when jobs are needed most. Individual retailers, meanwhile, trimmed inventory, streamlined supply chains and employed the latest technology to make their operations as efficient as possible, and traded ideas on best practices in these and other areas at NRF conferences. What is ahead as we move into recovery? Some believe we have experienced a transformation that will create a consumer economy much different than the past. Others argue that the post-recession economy will rebound much as the unbridled prosperity of the 1950s and 1960s that followed the Great Depression and World War II. Only time will tell. But there is one thing we can be assured: NRF will be there to bring together the thought leadership that guides our industry through its greatest challenges.

Myron E. (Mike) Ulman, III Chairman National Retail Federation

National Retail Federation: 2009 Annual Report

President’s Letter

etailers have closed the book on a year that none of us thought we would ever experience. For nearly all of 2009, Americans pulled back on everything but the bare necessities, and when they did shop they were focused almost exclusively on price.

As a result, companies were forced to do more with less – fewer stores, decreased staff, reduced inventory, and less room for error all around. In these times, it was more important than ever for retailers to be in tune with their customers, to deliver what shoppers expect but also to offer more. The stakes, of course, were high. Without their customers, retailers are nothing. The same is true at NRF. At NRF, we are keenly aware that retailers are our customers, and every decision is made with our member companies in mind. Much like retailers, NRF has worked tirelessly to help our customers through the downturn and position ourselves to be an even greater resource. Throughout 2009, NRF provided valuable services to members struggling to figure out the “new normal.” Our powerful consumer intelligence data helped retailers understand what to expect and how to react. In addition, NRF took educational opportunities to a new level, through relevant conference content, our SmartBrief daily e-newsletters, STORES Magazine, and free webinars on nearly every subject. NRF’s aggressive approach on Capitol Hill also elevated the image of retailers in Washington. Our experts testified more before Congress than any other retail trade group on a variety of issues, from data security to credit card interchange fees to legislation that let cash-strapped retailers “carry back” current losses to get billions of dollars in special tax refunds. In addition, NRF continued to educate both lawmakers and reporters on the impact organized retail crime has on sales – and customer safety. NRF was the retail trade group on the front lines of health care reform, both on Capitol Hill and in the media. Our health care expert was part of countless closed-door meetings to debate policy and represent the entire industry’s point of view. While we supported the idea of reform, we took a quick, firm stance against employer mandates which would have a devastating impact on job creation at a time of unprecedented unemployment. Like retailers, we understand how important it is to plan for the economic rebound. Along with a revamped, more intuitive website, NRF dove headfirst into social networks in 2009, launching NRF’s BIG blog in May; Facebook, LinkedIn and Twitter pages this past summer; and even our own YouTube channel. From initiating relevant marketing campaigns to streamlining inventories or charging ahead on growth initiatives, retailers have used the recession to become stronger. With a renewed energy and determination, NRF stands ready to continue our role as an industry leader in 2010 and beyond.

Tracy Mullin President and CEO National Retail Federation

The Courage to Lead: www.nrf.com

upfr upfro Advocacy & Influence Using its formidable clout to benefit the retail industry, in 2009 NRF engaged lawmakers from both political parties to protect and further retail’s interests on a wide range of issues. And, underscoring NRF’s impressive legislative influence, for the fifth year in a row, NRF’s Government Relations department was the only retail group recognized by The Hill Newspaper as one of Washington’s most powerful trade associations. Highlights of 2009 included: • Successfully persuading Congress to pass the “net operating loss carryback” tax legislation. • Leading industry efforts to rein in credit and debit card “swipe fees” (aka interchange). • Helping to found and chairing the legislative arm of the 800-plus member Coalition for a Democratic Workplace in opposition to the “card check” bill. • Being an aggressive opponent of the employer mandate provision of health care legislation while other retail trade associations sat back.

• Partnering with the U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE) to combat organized retail crime across the U.S.

Uncommon Membership Value As the world’s largest retail trade association, NRF’s mission is to help retailers achieve excellence in all areas of their business. NRF’s inclusive philosophy gives retailers of all formats and sizes a seat at the table. In recognition of NRF’s growth, strength and influence, NRF’s CEO, Tracy Mullin, was named one of the top association CEOs in the country. • The cumulative value of NRF retail membership discounts and non-member pricing on complimentary services is valued at more than $100,000 a year. • Committee access is offered as a benefit of membership. More than 3,000 retailers participate in the informationsharing, informal benchmarking, and networking benefits of our committee structure.

• Even in the challenging environment of 2009, NRF maintained more than a 90 percent membership retention rate, there was impressive membership growth and membership revenue increased by 35 percent.

Research and Education NRF leads the industry in providing research and education through a global network of conferences, trade shows and research partnerships. From small, intimate leadership summits to industry-wide global events, NRF offers networking and solutions for all retail practitioners.

attendees, boasted 175,000 net square feet of exhibit space. • The seventh annual Retail Horizons, released by the NRF Foundation, surveyed more than 400 senior level executives representing 153 companies to provide data that reflects their thinking in the midst of fourth quarter projections and the planning process for the following year. • NRF’s Associate Member Advisory Council launched the “Peer Reviewed” Retail Reference Center, an online, searchable repository of white papers and information.

Division Growth

• For the second year in a row NRF’s Annual Convention and Shop.org’s Annual Summit were named two of the fastest-growing tradeshows by Tradeshow Week Magazine.

NRF divisions continued to expand their reach in 2009, giving NRF the ability to build smaller communities focused on key issues including marketing, chain restaurants, technology standards, digital retail and more.

• For the third year in a row, NRF’s BIG show, the industry’s premier event for retailers across the world, earned a spot in Tradeshow Week’s 2008 Top 200 Annual Directory. The Big Show, which welcomed more than 18,500

• The National Council of Chain Restaurants (NCCR) conducted its first ever Chain Restaurant CEO Leadership Summit giving CEOs the opportunity to discuss major public policy issues with Congressional leaders.

your voice in retail worldwide... 4

National Retail Federation: 2009 Annual Report

ont • STORES Magazine became STORES Media in 2009, offering a mix of print and digital products that deliver thoughtprovoking content to the retail industry. • NRF Foundation (NRFF) began international expansion into China and Egypt to deliver retail training and industry credentials, based on NRFF’s industry skills standards for retail management. • Shop.org, NRF’s digital division, held its second annual Global E-Commerce Summit in Monaco to rave reviews. • NRF’s Association for Retail Technology Standards (ARTS) unveiled its RFP for Business Intelligence; published the first white paper on Cloud Computing for Retail; and tackled mobile commerce.

Contents 2

Chairman’s Message

President’s Letter

Up Front ‘09

Officers and Board Of Directors

98th Annual Convention and Expo

Government Relations

General Counsels Forum (DecisionMaker Series)

CEO Washington Summit (DecisionMaker Series)

Finance

Communications

Membership

Human Resources Executives Summit (DecisionMaker Series)

International

Business Partners

Associate Member Advisory Council

Loss Prevention

LP Senior Executive Summit (DecisionMaker Series)

Information Technology

Fair Factories Clearinghouse

NRFtech (DecisionMaker Series) NRF Divisions

Shop.org

RAMA

CMO Summit (DecisionMaker Series)

NCCR

ARTS

NRF Foundation

STORES Media

Advisory Boards, Councils and Committees

Financial Overview The Courage to Lead: www.nrf.com

NRF 2009 NRF is indispensible for two reasons. On one front, NRF provides a forum for retailers to work together to raise the standards in our industry. On the other, NRF allows our industry to advance a cohesive point of view and speak with a loud and clear voice to elected officials and opinion leaders on the important issues of the day.

Terry J. Lundgren

Chairman of the Board and Chairman of the Executive Committee

First Vice Chairman of the Board and Chairman of the Finance Committee

Myron E. (Mike) Ullman III

Philip L. Francis

Chairman and CEO J.C. Penney Company, Inc.

Executive Chairman PetSmart, Inc.

Thomas G. Bata Jr.

Brian K. Devine

Chairman and CEO BataCorp SA

Chairman PETCO Animal Supplies, Inc.

Chairman, President and CEO Macy’s, Inc. (Member Since 1934)

...the courage to lead

Robert M. Beall II Chairman Beall’s, Inc.

Artem A. Bektemirov

President California Retailers Association

CEO Pharmacy Chain 36.6

Roger N. Farah

Robert M. Benham NRF plays an important role for Saks. It is our link to what is going on in Washington and has an important voice in shaping policy. It is also instrumental in serving as a means for us to stay abreast of what is happening within the industry. The conferences and functional expertise are invaluable to us. NRF has both functional experts and the ability to facilitate best practice sharing. Stephen Sadove Chairman and CEO Saks Incorporated (Member Since 1948)

President and CEO Balliet’s LLC

National Retail Federation: 2009 Annual Report

President and COO Polo Ralph Lauren Corporation

Joe Flannery Byron L. Bergren President and CEO The Bon-Ton Stores, Inc.

President Weaver’s, Inc.

Mindy F. Grossman Cem Boyner Vice Chairman and CEO Boyner Holding A.S.

President and CEO HSN

Philippe Houzé Jan de Jong Global Industry Manager, Retail Microsoft Corporation

Chairman of the Executive Board Galeries Lafayette

Elliot S. Jaffe Claudio Del Vecchio Chairman and CEO Retail Brand Alliance, Inc.

William Dombrowski

Chairman and Founder The Dress Barn, Inc.

09 Officers

Second Vice Chairman of the Board

Corporate Secretary

President and CEO

Chairman, NRF Foundation

H. James Baum

Tracy Mullin

Arnold B. Zetcher

Stephen I. Sadove

CEO BGH “Here’s Hallmark” Shops

President and CEO National Retail Federation

Chairman and CEO, Retired The Talbots, Inc.

Chairman and CEO Saks Incorporated

Board of Directors M. Farooq Kathwari

Jon L. Luther

Daryl Routzahn

J. Hill Stockton

Chairman, President and CEO Ethan Allen Interiors Inc.

Chairman Dunkin’ Brands

President and CEO Routzahn’s

President and CEO Norman Stockton, Inc.

Lovro Mandac

Matthew E. Rubel

Trudy F. Sullivan

CEO Kaufhof Warenhaus AG

President and CEO Collective Brands Inc.

CEO The Talbots, Inc.

William L. McComb

Chuck Rubin

Burton M. Tansky

CEO Liz Claiborne Inc.

President, North American Retail Office Depot, Inc.

President and CEO The Neiman Marcus Group, Inc.

Ron Sacino

Kip Tindell

President and CEO Sacino’s Formalwear

Chairman and CEO The Container Store

Gordon I. Segal

Gary White

Chairman Crate and Barrel

CEO United Retail Group, Inc.

Jeffrey B. Sherman

James F. Wright

President and CEO Hudson’s Bay Trading Company

Chairman and CEO Tractor Supply Company

Daniel S.C. Koo Chairman Shui Hing (HK) Limited

Kay Lawther Krill President and CEO Ann Taylor Stores Corporation

Chris McCormick

Howard R. Levine

President and CEO L. L. Bean, Inc.

Chairman and CEO Family Dollar Stores, Inc.

Robert McFarland

Keith Lipert

SVP and General Manager SAP Retail

President Keith Lipert Gallery

Mitchell B. Modell

Walter F. Loeb

CEO Modell’s Sporting Goods

President Loeb Associates

Jorge Pont

Terry J. Lundgren Chairman, President and CEO Macy’s, Inc.

Assistant to the Chairman, Sr. Director, International Affairs El Corte Inglés, S.A.

Edward W. Stack Chairman and CEO Dick’s Sporting Goods, Inc.

The Courage to Lead: www.nrf.com

NRF 2009

98th Annual

onvention and

ore than 17,000 retail executives and vendors from nearly 70 countries took advantage of the educational and networking opportunities at NRF’s 98th Annual Convention and EXPO themed “Inspiration Starts Here.”

NRF Directors rang the closing bell at the New York Stock Exchange on January 12, 2009.

Expo

NRF Board Rings the Closing Bell NRF directors took a quick break from Convention activities to travel down to New York’s financial district to ring the closing bell at the New York Stock Exchange, marking NRF’s 98th Annual Convention.

Lululemon Athletica CEO Christine Day addresses delegates at the BIG Show.

The EXPO Hall Floor Expands Iconic retailers address attendees at the BIG Show Convention attendees saw an impressive line up of speakers at the BIG Show in 2009. The keynote speaker, Wal-Mart President and CEO Lee Scott, spoke to a standing room only audience about Wal-Mart’s efforts to create a more ethical and environmentally-friendly supply chain and their overall commitment to being more sustainable while staying true to Wal-Mart’s mission of “helping people save money so they can live better.” His formal remarks were followed by a candid Q&A with NRF President and CEO Tracy Mullin. J.C. Penney Chairman and CEO Mike Ullman shared a podium with economist Mark Zandi and investment banker Peter J. Solomon in a thought-provoking conversation about the economic downturn. Burt Tansky, CEO of Neiman Marcus, Roger Farah, President and CEO of Polo Ralph Lauren, and The Container Store Chairman and CEO Kip Tindell discussed the impact of inspirational leadership on business. Lululemon CEO Christine Day talked about the secrets of sustainable, profitable growth and Annette Verschuren, CEO of The Home Depot Canada and Asia, tackled the topic of international expansion and the global supply chain. 8

National Retail Federation: 2009 Annual Report

The EXPO Hall floor featured 175,000 square feet of exhibit space and showcased unique, interactive pavilions: Seeing Green, an environmentally friendly concept store; the Customer Experience Concept Store that combined the latest in technology, digital signage, lighting, and sound and smell; The ARTS Pavilion that demonstrated how technology standards can help retailers improve their efficiency while achieving cost savings; The Supply Chain Hub with the latest in logistics and transportation; and the NRF Foundation, our industry’s primary source for retail training and career information.

DESiGN STUDiOFor the third year, the NRF DESiGN STUDiO brought together retailers and store design firms and vendors in a unique networking and educational experience. Among the many notable education sessions held in the STUDiO, designer/author Mark Gobe and internationally known store designer Giorgio Borruso were featured.

Blogging from the BIG Show This year, NRF launched an official blog that captured many of the education sessions, scenes from the EXPO floor, and unique moments at the BIG Show. www.annual09.nrfblogs.com.

Wal-Mart CEO Lee Scott keynotes the BIG Show.

CONVENTION AND EXPO The Annual Luncheon provided a great networking opportunity for hundreds of retail professionals.

Retailers gather for the Conventionâ&#x20AC;&#x2122;s opening keynote address.

The Opening Night Gala Reception at Gotham Hall.

Retailers pack the exhibit floor at the National Retail Federation 98th Annual Convention.

The Green Concept Store focused on environmental sustainability, featured green products and technologies such as lighting, flooring, surfacing, HVAC reduction and technologies. The Customer Experience Concept Store showcased the latest products and technologies allowing retailers to enhance the customer experience by combining interactive scenarios such as social networking and gaming with lighting and digital signage.

The The Courage Courage to to Lead: Lead: www.nrf.com www.nrf.com

NRF 2009

NRF is the Voice of Retail on Capitol Hill NRF’s long held reputation as retailing’s most effective advocate in Washington is based on several well-defined factors: • No other organization represents the breadth, depth and diversity of membership as does NRF; • No other organization offers staff expertise in areas including tax, trade, health care, labor management relations, loss prevention, IT and retail operations; • No other organization has the ear of policy makers in Washington who have long recognized NRF as the voice of retail in the nation’s capital; • And no other organization actually delivers the goods – time after time.

GOVER presented unusually daunting challenges: an historic recession, a chilly retail environment, legislative issues of monumental significance, and a bitter partisan divide on Capitol Hill and across the country.

Health Care Debate over health care reform consumed much of the Congressional agenda in 2009. NRF was ready. We had formed a Board-driven CEO Health Care Task Force in 2006 which had worked to craft retailers’ Vision for Health Care Reform, articulating

our industry’s goals: cost reduction; expanded access to coverage; malpractice reform; group purchasing arrangements; and health IT. And we had long established relationships with those legislators who would be defining the legislation, including Senator Ted Kennedy (D-MA), who had made this issue his life’s work, and Senator Max Baucus (D-WY), Chairman of the powerful Finance Committee. In fact, it was Senator Baucus who took on the responsibility of drafting a Senate compromise bill. For weeks, he met privately around the clock with a handful

So, it’s no surprise that NRF is the group retailers and elected officials turn to when they need results. To underscore NRF’s successful legislative track record, for the fifth year in a row, NRF’s chief lobbyist, Steve Pfister, was named one of the most powerful business advocates in Washington.

Fighting the Good Fight Protecting retailers’ interests in Washington is never easy, but 2009

Senator Orrin Hatch, R-UT, left, speaks with National Retail Federation Senior Vice President for Government Relations Steve Pfister, center, and NRF Senior Vice President and General Counsel Mallory Duncan, right, at the NRF Washington Leadership Conference, held at the National Press Club in Washington, D.C.

National Retail Federation: 2009 Annual Report

NMENT RELATIONS House Majority Whip James Clyburn, D-SC, speaks at the NRF Washington Leadership Conference, held at the National Press Club in Washington, D.C.

of senators representing both parties seeking middle ground. Yet, he insisted on meeting with the NRF Board of Directors when they arrived on Capitol Hill during the mid-year Board meeting. Senator Baucus recognized (as do many legislators) that retailers employ one fifth of the nation’s workforce, and have a valuable point of view on anything that affects employees. In that meeting, NRF directors made clear that they supported health care cost reduction and expanded health care coverage, but they made a strong case against an employer mandate that would dictate retailers’ business and benefits policies into the future. That same point of view was communicated religiously to members of both

parties through CEO visits to Capitol Hill, organizing and leading coalition lobbying, engaging in wide ranging news media outreach and supporting advertising campaigns that explained how mandates could create retail job losses. But as the debate continued through much of the year to heightened controversy and divisive rhetoric, it became clear that politics – not policy – would be the guiding principle of the legislation. By the end of the year, partisanship had won out and NRF continues to move issues critical to all retailers – such as the recasting of the U.S. interchange system – through Washington’s complex legislative, regulatory and judicial systems under the leadership of NRF senior staff. Without such coalescing leadership, the voices of individual retailers would be lost. Through the NRF we are being heard – loudly and clearly. Dean Sheaffer Senior Vice President Financial Operations Boscov’s, Inc. (Member Since 1961)

acrimony pervaded Capitol Hill. NRF will continue to press the industry’s point of view aggressively as the legislation continues to unfold, and will push hard in the hope that 2010 will bring a better, final result.

Stimulus Bill With retailers facing one of the most challenging years in decades, NRF warned Congress early in 2009 that it would be “difficult, if not impossible” to foresee an improvement in the economy unless lawmakers included major incentives for consumer spending in the $787 billion stimulus bill signed into law by President Obama. The measure ultimately included a $116 billion payroll tax credit that amounted to $400 per individual or $800 per couple, but the funds were not enough to keep consumer spending from sliding.

NRF Helps Bring Cash Influx to Struggling Retailers Faced with weak sales and an ongoing credit crunch, many retailers headed into the holiday season significantly short (continued on next page)

The Courage to Lead: www.nrf.com 11

NRF 2009

of the operating cash needed to fully stock shelves and staff stores. But NRF was able to convince Congress to pass legislation that brought retailers and other businesses more than $10 billion by allowing them to “carry back” losses suffered during the recession in order to reduce tax liabilities from profitable years as long as five years ago rather than the usual two years. Passage came after NRF testified on Capitol Hill and brought retailers to Washington to tell lawmakers they might be forced to lay off workers, close stores or even go out of business without the funds. “Card check” union organizing legislation: After fast-track treatment in 2007 and labor-backed victories in the 2008 elections, supporters of the Employee Free Choice Act expected swift congressional passage in 2009. But NRF helped lead a broad-based coalition of business groups opposing the legislation, arguing that taking away secret ballots in union elections and allowing government arbitrators

NRF Vice President, Tax Counsel Rachelle Bernstein speaks on Capitol Hill. 12

NRF provides small, independent retailers like Balliet’s a voice in public policy issues that would otherwise be unobtainable. NRF and its government relations staff is masterful at building public policy consensus among its diverse retail membership and forcefully representing our interests on Capitol Hill. Robert Benham President and CEO Balliet’s LLC (Member Since 1967)

to unilaterally impose union contracts would have an adverse impact on the rights of employees and the ability of employers to create jobs. The bill has stalled, but continues to be a top priority for organized labor in 2010. Credit Card “swipe” Fees: Retailers spent nearly $50 billion in unnecessary credit and debit card interchange (aka “swipe”) fees in 2009. In our ongoing efforts to bring these soaring fees under control, NRF convinced Congress to include a Government Accountability Office study of interchange fees charged to merchants in the Credit CARD Act reform bill. The study found that the fees are rising, driving up costs for consumers, and that consumer prices could be reduced if the fees were reduced. Those findings provided needed ammunition that should ultimately help convince Congress to pass pending interchange legislation. Instant Credit: NRF asked the Federal Reserve to reconsider proposed new rules that threaten retailers’ ability to offer customers instant credit. Under the Credit CARD Act, retailers would be required to “consider” customers’ ability to pay. That’s currently done by a quick computerized check of credit

National Retail Federation: 2009 Annual Report

House Ways and Means Committee Chairman Charles Rangel, D-NY, left, speaks with Gene Nicholas of Nicholas Luggage and Gifts of Kansas City, Mo., during NRF’s annual Washington Leadership Conference.

bureau data, but the Fed has interpreted the language to require retailers to examine customers’ income, assets and current obligations at the point of sale – an onerous process that could take days because the information isn’t included in credit bureau databases. A decision is expected by February 2010. Gift cards: After years of watching often-conflicting legislation passed at the state level, Congress in 2009 passed the first federal regulations for gift cards as part of the Credit CARD Act. The new law bars expiration dates that take effect less than five years after a card is issued and dormancy fees that kick in after less than a year. Most major retailers have already dropped expiration dates and dormancy fees, so the legislation will require bankissued “mall” cards to more closely match what retailers have already done voluntarily. Estate tax: The House voted to make 2009 estate tax levels permanent rather than allowing the tax to be temporarily repealed in 2010 and then return to exorbitant rates in 2011. The vote to freeze the rate at 45 percent and the exemption level at $3.5 million per individual would make estate planning simpler and hold down rates going

GOVERNMENT RELATIONS

forward. Without congressional action, the rate is currently set to drop to zero in 2010 but go back up to 55 percent in 2011 with an exemption of only $1 million. NRF has supported a permanent solution because estate taxes make it difficult for family owned businesses to move from one generation to the next.

Washington Leadership Conference In 2009, NRF convened its 74th annual Washington Leadership Conference which brings together top retail government affairs specialists from around the country for two days of intensive discussions about key legislative proposals and one-on-one visits with members of Congress. This year, perhaps because of the critical nature of the issues, retailer attendance skyrocketed to new highs. At the conference, the three most pressing concerns, the economy, health care, and “card check” legislation were addressed by the speakers and in lobby visits.

We continue to rely on NRF to represent the interests of the retail industry. In this past year, NRF has spoken on behalf of retailers on such important issues as EFCA, health care, the CIT crisis and many others. NRF is also an important source of information and guidance on regulatory developments affecting retailers such as the CPSIA, Red Flags, etc. Bottom line: The NRF helps me do my job more effectively. Paul Tang EVP, General Counsel Burlington Coat Factory Warehouse Corporation (Member Since 2007)

General Counsels Forum

Transportation Secretary Ray LaHood speaks at the National Retail Federation Washington Leadership Conference.

Transportation Secretary Ray LaHood was the keynote speaker and addressed attendees about the recently enacted economic stimulus bill. LaHood said the retail industry would benefit from the nearly $50 billion in infrastructure spending included in the stimulus bill signed by President Obama because the new highways, bridges, rail, port, airport and other transportation projects would make it easier to get merchandise to stores, making retail supply chains more efficient. And construction workers hired to build those projects would have more money in their pockets that would be spent in retail stores, he added. Retailers also heard from House Majority Whip James Clyburn (D-SC), who suggested that high health care costs are a financial drain on businesses and that health care reform is essential “if we’re going to get this economy going.” Senator Orrin Hatch (R-UT) also addressed the group, and urged retailers not to compromise in their opposition to “card check” legislation that would make it easier to unionize retail store workers. Hatch said passage of the bill – the Employee Free Choice Act – could open the floodgates for other pending labor-backed legislation.

NRF’s General Counsels Forum is an invitation-only committee made up of the most senior legal officers among NRF’s retail membership. The committee discusses trends in areas such as antitrust, securities law, wage and hour regulations, pricing accuracy, alternative dispute resolution, advertising, and benchmarking of legal programs. In 2009, Forum members shared insights on issues including health care reform, the Employee Free Choice Act “card check” bill that would make it easier for unions to organize retail workers, and credit card interchange fees. At the Forum’s summer meeting, Federal Trade Commission member Pamela Harbour discussed the FTC’s agenda under the Obama Administration, particularly the renewed focus on privacy, data security, and antitrust. Also discussed at the meeting were the enhanced role of the Securities and Exchange Commission, new regulations under the Consumer Product Safety Improvement Act, “say-on-pay” legislation that would give shareholders a non-binding vote on executive compensation, and regulations under the Americans with Disabilities Act. The Forum meets at least twice a year to share strategy and exchange ideas on cutting edge legal and management issues of concern to retail law departments.

The Courage to Lead: www.nrf.com

NRF 2009

CEO WASHINGTON SUMMIT NRF Board Discusses Health Care Reform with Congress during CEO Summit

Senate Finance Committee Chairman Max Baucus, left, meets with the NRF Board of Directors, on health care reform. NRF Chairman Myron E. “Mike” Ullman III, chairman and CEO of J.C. Penney, left, speaks with Senator Kay Bailey Hutchison, R-TX.

Senate Health, Education, Labor and Pensions Committee Ranking Member Mike Enzi, R-WY., left, speaks to the National Retail Federation Board of Directors during a meeting at the U.S. Capitol. Listening at right is NRF Chairman Myron E. "Mike" Ullman III, chairman and CEO of J.C. Penney. NRF First Vice Chairman Philip L. Francis, Executive Chairman of PetSmart, left, listens to House Minority Whip Eric Cantor, R-VA., during a meeting at the U.S. Capitol.

National Retail Federation: 2009 Annual Report

As the governing body of NRF, one of the key roles of the Board of Directors is to help craft public policy strategy and tactics on the key issues of concern to retailers. Directors take this responsibility seriously and in 2009 were actively involved in some of the most pressing issues facing Congress in decades. Getting health care reform right was the top concern for the NRF Board of Directors as retail executives gathered in Washington for their mid-year meeting and CEO Summit. Board members met at the U.S. Capitol with House and Senate leadership and other key players, telling lawmakers NRF strongly supports health care reform, but that legislation under consideration would drive up labor costs while doing little to make health coverage more affordable. The Board warned that employer mandates requiring companies to either provide health coverage for workers or pay huge financial penalties would be a “job killer” that could force layoffs by retailers unable to raise prices in this economy to cover the added expense. The Board asked that Congress instead focus on steps to make health coverage more accessible by reducing costs, including recommendations made in the NRF Vision for Health Care Reform on group purchasing of insurance, wider use of computerized medical records, malpractice reform and other steps. Senate Finance Committee Chairman Max Baucus, (D-MT), one of the most pivotal figures in the reform debate – interrupted his intense, closed-door meetings with a core group of senators working on compromise legislation to meet with NRF directors. He acknowledged retailers’ concerns and asked CEOs to continue to work with him as he sought a way to expand coverage without driving up costs for employers. The Board also met with Senate Health, Education, Labor and Pensions Committee Ranking Member Mike Enzi, (R-WY) Senate Minority Whip Jon Kyl, (R-AZ) Senator Ben Nelson, (D-NE) House Minority Whip Eric Cantor, (R-VA) and Blue Dog Democrats leader Jim Cooper, (D-TN) among others. While at the Capitol, Board members also raised the controversial Employee Free Choice Act, which would make it easier for unions to organize workers in retail stores. CEOs told lawmakers they would oppose the measure even if its central “card check” provision were stripped out of the bill. Without card check, the legislation would still allow for “quickie” elections and force employers to submit to binding arbitration if agreement on a first contract with a union could not be reached in 120 days. In other Board action, directors formed a search committee to seek a new chief executive for NRF. Current president and CEO Tracy Mullin is scheduled to retire at the end of June 2010.

FINANCE The NRF Financial Executives Council, Internal Audit and Compliance Council, and IT Audit Council provide a unique opportunity for peer-to-peer exchange of information and enable members to benchmark themselves against industry competitors; share best practices and explore the impact of emerging issues through presentations and discussions with thought leaders. In addition, the councils address and advocate on behalf of the industry those issues that affect the business (tax, FASB, homeland security; banking). Council members participate in online surveys on topics such as background checks, corporate gift policies, customer identity theft protection, evaluating store remodels, employee discounts, and audit committee meetings to provide immediate, confidential access to a wealth of industry knowledge. These Councils were accredited providers of more than 70 industry specific continuing professional education credits (CPE) at no cost to members.

Economic Challenges Encourage a United Front Few in retail can remember a time when the industry faced challenges as severe as those seen in 2009. NRF brought together its members to identify strategies to deal with the fallout of the CIT bankruptcy, to discuss the impact of interchange on retailers and to work with the settlement trustees of the VISA lawsuit to ensure recipients were identified and funds distributed efficiently.

Finance Councils Grow in 2009 During 2009, participation in NRF’s Finance Councils grew to 90 retail companies and Council activity increased significantly to address hot

topics including enterprise risk management; emerging issues in financial reporting; effective practices in cost recovery, and managing the business in a no-growth environment. The Council’s list serve continued to be one of its most valued resources. During the year members exchanged information on topics including sales tax, capitalization policies, the 4-5-4 calendar, store maintenance and store openings. I find the information exchanged through the Financial Executives Council to be very helpful and the topics discussed extremely relevant. The opportunity to just get together, find solutions to common challenges with my peers, and forge relationships has become a very valuable part of my every day work environment.

Members of NRF’s Internal Audit and Compliance Council meet at American Eagle Outfitters in October.

Standards by U.S. Issuers, NRF noted that the reporting requirements would be uniquely burdensome and costly to the retail industry. NRF explained that retailers have significant investments in Property, Plant, and Equipment (PP&E) and the systems that track them. The proposed requirement to account for PP&E on a component basis would require substantial investments in time and expenses to reconfigure the systems. We also expressed concerns that current widely-used inventory methods would be disallowed again resulting in significant system and process conversion costs and noted that such changes would have little value add from a profitability and efficiency perspective.

Natalie Levy VP, Accounting The Container Store (Member Since 1997)

Financial Executives Voice Industry Concerns to Regulatory Bodies Throughout the year, NRF’s Financial Executives Council closely followed regulatory efforts to conform financial reporting practices to international standards. In response to the SEC’s Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting

Also in 2009, the FASB released a highly-anticipated Discussion Paper on Lease Accounting requiring companies to capitalize a majority of their leases, a significant change for the retail industry. In comments, NRF noted that many retailers have hundreds, if not thousands, of stores, each with its own unique lease agreement. Under the proposal, each of the leases would have to be evaluated and recorded, and we questioned whether the cost of implementation could outweigh the benefits. The Courage to Lead: www.nrf.com

NRF 2009

CommunicAtions A Strong Voice in the Retail Industry As the voice of retail worldwide, NRF takes seriously its role of educating the public, the media and elected officials about the important role that retailing plays in the global economy and the effects of policy decisions on retailers’ ability to serve their customers. In 2009, the NRF public relations team worked diligently to represent the retail perspective on both advocacy and industry initiatives. Regardless of the issue, NRF ensured that the retail industry’s voice was heard. From a media standpoint, 2009 was a banner year for NRF with more than 47,000 hits in media outlets worldwide, compared to 32,627 mentions in 2008. NRF was front and center, expressing retail’s views on important issues like the impact of the economy on consumer spending, health care reform, CIT, the Employee Free Choice Act, swipe fees and organized retail crime.

engage the industry differently, integrating social media tools such as Facebook, Twitter and LinkedIn to provide NRF members with a new forum to connect with each other and thought leaders throughout retailing. NRF also created Retail’s BIG Blog, a powerful resource for the retail community that features posts from NRF experts on policy, retail trends, event speakers, and retail companies. Since its launch in May, Retail’s BIG Blog has become a valuable news source for many in the industry. NRF has been a great resource to L.L. Bean on a number of levels. Personally, I have found industry trend information to always be on target, and the networking opportunities have been invaluable. Other L.L. Bean executives participate in topic specific forums that provide up-to-date education and issue information that is timely and relevant to our business. Chris McCormick

Expanding NRF’s Reach with Social Media A variety of new communications tools launched in 2009 enabled NRF to

President and CEO L. L. Bean, Inc. (Member Since 1976)

NRF Senior Vice President Steve Pfister on CNBC explains how employer mandates can put the squeeze on small and mid-sized retailers.

Other NRF communications vehicles leveraged by retailers include NRF, Shop.org and NRF Global SmartBriefs; STORES Magazine and its media outlets; Washington Retail Insight and NRF Update. With more companies facing travel constraints, NRF webinars have provided a useful means of extending NRF educational opportunities. In (continued on next page)

“Long-term economic stimulus is critically important, but immediate stimulus is absolutely essential.” Steve Pfister NRF Senior Vice President, Government Affairs discusses the need for immediate action to address the spiraling economy. New York Times, February 6, 2009 16

National Retail Federation: 2009 Annual Report

COMMUNICATIONS

“The unfortunate economic events of the past year have played an intricate role in how criminals continue to rip off the retail industry.” Joe LaRocca NRF senior asset protection adviser, on how the economy is contributing to a rise in organized retail crime Washington Post, June 11, 2009

“People are really paying attention to these articles, and the effects are extremely damaging.” Tracy Mullin NRF President and CEO, explaining why news reports citing unfounded remarks from retail critics pose problems for companies USA Today, April 14, 2009

Shop.org Executive Director Scott Silverman on the Today Show discussing online holiday shopping tips.

CNBC’s Erin Burnett interviews NRF Vice President Scott Krugman about last minute holiday shopping.

Fox talks to NRF Vice President Ellen Davis about Black Friday and Cyber Monday expectations.

Dan Butler, NRF Vice President for Retail Operations discussed the holiday season with FOX.

The Courage to Lead: www.nrf.com

NRF 2009

Media outlet hits: 2008: 32,627 hits worldwide 2009: over 47,000 2009, NRF hosted more than 40 webinars on topics such as holiday trends, PCI compliance, health care reform, social media and eCommerce. Additionally, NRF increased the number of analyst and media briefings in 2009.

Internet Strategies Revamps NRF Websites As the Internet became a more and more essential communications tool, NRF’s Internet Strategies Team focused considerable time and resources to update the look and functionality of NRF’s home page and individual websites. In 2009, the team revamped websites for NRF Divisions including the National Council of Chain Restaurants, the Retail Advertising and Marketing Association as well as

the NRF Foundation. In addition, a site was built for FIRAE, the Forum for International Retail Association Executives.

Convention Press Coverage Increases In 2009, NRF’s public relations team welcomed more than 300 reporters and analysts to NRF’s BIG Show in New York City. During the Annual Convention, many prominent reporters and CEOs attended the invitationonly Press and Executives reception. The exceptional line-up of guests included CEOs from Macy’s, JCPenney, lululemon athletica and Urban Outfitters along with retail reporters from The New York Times, Dow Jones and USA Today.

News Date Chart

40,000 20,000

2005

2006

Number of News Clips 01/01/2006 to 12/31/2009

NRF press coverage continued to grow steadily in 2009.

“Quite simply, mandates don’t work well for retailers. You can be for reform and against employer mandates.” Neil Trautwein NRF Vice President and Employee Benefits Policy Counsel, reacting to Wal-Mart’s support of employer mandates in health care coverage Women’s Wear Daily, July 2, 2009

National Retail Federation: 2009 Annual Report

2007

“There are many paths to heaven. Our heaven is a transparent, competitive market, so we’re happy no matter how we get there.”

COMMUNICATIONS

Mallory Duncan NRF SVP and General Counsel, discussing interchange legislation being considered by Congress BusinessWeek, October 19, 2009

“If retailers can’t find a way to finance inventories for the 2009 holiday season, many could be forced to close stores, lay off workers or even go out of business… this will help keep that from happening.” 2008

2009

2010

Rachelle Bernstein NRF Vice President, Tax Counsel praises the passage of legislation that will allow retailers to carry back net operating losses. Washington Post, November 6, 2009

NRF expanded its social media strategy with the launch of Retail’s Big Blog as well as new LinkedIn and Facebook communities.

The Courage to Lead: www.nrf.com

NRF 2009 2009 NRF

Membership Despite a tough economic environment in 2009, NRF’s membership remained strong and growing. Members from all formats of retail, representing six continents and 60 countries, continued to look to NRF for information and resources to help them weather the economic downturn. Whether through NRF’s original research, benchmarking or consumer trend information, through participation in the multiplicity of NRF committees and councils, or because of NRF’s aggressive retail representation before Congress, members sought out NRF for information, guidance and perspective. NRF responded, providing members with cost-effective ways to instantly access industry data, resources, and networking opportunities—all the while delivering world-class advocacy on the issues that matter most.

Over the course of the year, NRF: • Conducted

more than 40 webinars and 120 conference calls on topics

ranging from the Employee Free Choice Act, to healthcare reform, to retail sustainability. Webinars are archived on NRF’s website for up to one year and are accessible by members 24/7. • Utilized its member-only committee structure to provide retail members with access to instant benchmarking on operational practices. NRF offers its members the ability to participate in more than 50 subjectmatter specific committees and task forces—included as a benefit of membership. • Launched the NRF Retail Reference Center—a searchable one-stop shop for white papers, NRF original research, and other resources. Content is organized by functional area in retailing and is downloadable for portability and sharing. • Visited with its members to discuss their current challenges, demonstrated how NRF can assist them,

Retailers gather for a Boston area networking dinner, sponsored by SAS Institute.

National Retail Federation: 2009 Annual Report

and provided them with local networking opportunities through NRF Networking Nights dinners in nine cities throughout the US. NRF’s diverse membership has resulted in a vibrant, secure association, one that reflects the multi-faceted industry it represents and serves.

NRF Welcomes its Newest Members Among other new members, NRF is proud to welcome the following retailers and consumer brands to its membership: • Aeropostale, Inc. • Avenue You Beauty Store • Big 5 Sporting Goods • Bob Evans Farms, Inc. • Colombian Emeralds International (Bahamas) • Cortefiel, S.A. (Spain) • Donatos Pizza • DSW Inc. • Guitar Center, Inc. • H&O (Israel) • j.jill • Jos. A. Bank Cothiers, Inc. • Kirtilal Kalidas Jewellers Private Ltd. (India) • Loehmann’s Holdings Inc. • Louis Vuitton North America, Inc. • Meijer, Inc. • O’Charley’s Inc. • Ratner Companies • rue21, Inc. • Wendy’s/Arby’s Group

The NRF is an invaluable organization to us. The NRF facilitates knowledge sharing and interaction among retailers and their legal departments. I canâ&#x20AC;&#x2122;t even begin to list the number of times the NRF has put us in touch with experts on matters or helped bring clarity to an issue.

2009 Global Retail Membership by Annual Sales Over $5 billion 8%

Michael Brizel Executive Vice President & General Counsel Saks Incorporated (Member Since 1948)

$500 million to $1 billion 9%

$1 billion to $5 billion 14%

$100 to $500 million 15%

Up to $1 million 28%

Consumables Miscellaneous Hardlines (C-Store, Cosmetics (Auto, Books, Gifts, Home/ Grocery, Restaurant, Office, Pet, Toys) Housewares, Pharmacy) 13% Hardware, Furniture 12% 8% Jewelry 3%

$1 to $10 million 14%

$50 to $100 million 4% $10 to $50 million 9%

Discount Stores 2% Department Stores 9% Consumer Electronics 2%

Accessories (inc. Luggage, Shoes) 22%

2009 Global Retail Membership by Type

The value we receive from membership in NRF is tremendous. NRF represents our interests in Washington with all the weight that such a highly-respected trade organization with so many members can bring. In addition, they are one of our most valuable resources for keeping on top of the ever-changing landscape of regulations and policies that affect our business. Facilitating this ongoing communication between our company and the many U.S. and state regulatory agencies is one of the most important reasons why we value our NRF membership so highly. Virginia Thompson Director of Import/Export Operations and Intl. Trade Compliance Crate and Barrel (Member Since 1990)

Apparel 24%

Entertainment 2% Sporting Goods 3%

MEMBERSHIP

There is no question that the NRF is essential, as a unified voice for all retailers, regardless of their size. Trying to go it alone in todayâ&#x20AC;&#x2122;s retail environment, or anytime, just cannot be as productive as with the NRF. It seems even more important with the current unprecedented happenings in Washington. Terrance Jarvis President and CEO Strasburg-Jarvis, Inc. (Member Since 2000) The Courage to Lead: www.nrf.com

NRF 2009 NRF’s Erik Autor and Steven Glover toured the Jiangsu Hongliu Bedsheet Co., Ltd. Factory following their participation in the 2009 Intertextile Shanghai Home Textile Conference. Pictured are from Left to Right: Grace Zhu, Jian Jun Huang, Erik Autor, Steven Glover, Larry Huang.

Human Resources Executives Summit At NRF’s Human Resources Executives Summit in 2009, more than 70 of the retail industry’s senior level HR professionals and employment law executives came together in San Diego for the high-level event. Speakers included H&M General Counsel Laura Brandt who reviewed Occupational Safety and Health Administration considerations that every human resource executive needs to know. David Lansky, a nationally recognized expert in accountability and quality measurement, and a leading driver of quality and value-focused health care, discussed the state of health care in an economic decline. Other topics included retail management, practical considerations of COBRA Administration, and the Do’s and Don’ts in Layoffs.

National Retail Federation: 2009 Annual Report

International retailers enjoy an evening at NRF’s 2009 International Retail Reception in New York City.

Executives from 13 international retail associations gathered at the 2009 Forum for International Retail Association Executives (FIRAE) meeting, held in New York in conjunction with NRF’s Annual Convention & EXPO. NRF serves as the FIRAE Secretariat.

MEMBERSHIP

INTERNATIONAL Providing a Global Perspective Increasingly more retailers are seeking international growth opportunities. To meet the challenges surrounding international retailing, more companies turn to NRF for information and assistance. Nearly twenty percent of all NRF members are now based outside of the United States. In fact, international attendees represent the fastest growing segment at the NRF Annual Convention & EXPO, with nearly 3,000 individuals from 62 countries attending the 2009 BIG Show.

NRF continued to provide a forum for international retailers in 2009 and: •

Conducted the 7th Annual European Retail Technology Summit in Amsterdam, The Netherlands. Produced in partnership with Germany’s EHI Retail Institute, the Summit provided executives a chance to test and redefine a strategic assessment of Europe’s retail IT landscape through real-

world case studies presented by leading practitioners and experts. • Conducted the 2009 Global E-Commerce Summit in Monaco, through a partnership between its digital division, Shop.org, and EMOTA (European E-commerce and Mail Order Trade Association). The Summit provided executives from more than 24 countries with strategies and tactics to achieve cross-channel synergies, expand globally, and integrate new technologies such as social networking and mobile marketing.

•

Launched the LinkedIn FIRAE International Retailing Group on behalf of the Forum for International Retail Association Executives (FIRAE), for which NRF serves as the secretariat. The LinkedIn group offers retail executives and industry service providers engaged in international retailing an opportunity to network and share information and ideas with each other and the leader ship of more than 30 retail trade associations from around the world.

International Retail Member Distribution Canada 34% Europe 21%

Caribbean & Latin America 20% Middle East & Africa 13%

Asia-Pacific 12%

The Courage to Lead: www.nrf.com

Business Partners A special thanks to our business partners who support NRF and its divisions throughout the year and around the globe.

Datavantage + CommercialWare + eOne + Fry

In this era of blogs, tweets and LinkedIn, nothing compares with the opportunity to listen, speak and connect face-to-face at the NRF STUDiO. Each year, the unique opportunity the show provides to meet in person, be it through chance encounters or planned connections with old friends or international clients, creates an event not to be missed. The NRF Big Show is unique in its bringing together decision-makers across all aspects of retail: logistics, operations, technology, marketing and design. While there are many shows that speak to each of these constituencies, it is the dynamic interaction between all aspects, both domestic and international, that makes the NRF Big Show the most important show for professionals on the creative side of retail. Ken Nisch Chairman JGA, Inc. (Associate Member Since 2004)

National Retail Federation: 2009 Annual Report

CONVENTION AND EXPO

AMAC

Board of Directors

Associate Member Advisory Council

Incoming Chairman Jay Heavilon President ARS Interactive

Richard Arnold VP, Marketing - Retail Solutions Division NCR Corporation

NRF’s Associate Member Advisory Council launches new online member benefit: The NRF Retail Reference Center The NRF Associate Member Advisory Council (AMAC) launched a new associate and retail member benefit in 2009, the NRF Retail Reference Center. Featuring a “peer reviewed” component, the Retail Reference Center is a one-stop shop for white papers, NRF original research, and other resources. Content, which is organized by functional area in retailing, is both searchable and downloadable. Within three months of the launch of the Retail Reference Center, more than 1,000 users had searched for articles, with 20 percent of visitors viewing the “Peer Reviewed” section first. In addition, 12 percent of visitors to the “Industry Information” page on NRF’s website clicked through to the Retail Reference Center.

“The NRF Reference Center not only allows us to share our points of view with others in the retail community, but we also received valuable feedback from our peers. The process of submitting an article was simple and NRF responded quickly to questions, keeping in constant contact, right through to the final approval. We will continue to use the NRF Reference Center as a way to communicate with our partners, peers, and industry leaders.” Leslie Dodwell Marketing Manager Torex (Associate Member Since 2006)

Anne Brouwer Senior Partner McMillanDoolittle

Joseph F. Coradino President PREIT Services

Ann Cunningham Director, Industry Marketing ACI Worldwide, Inc.

James E. Dion President Dionco Inc.

Beth Howard Director, Marketing and Store Systems Sales PCMS Datafit, Inc.

Stacy Janiak Vice Chairman - National Sector Leader, Retail Deloitte

Larry Mullen

Continuing its core mission of representing the trading partner component of NRF’s membership, AMAC conducted a “Town Hall” meeting at the Annual Convention as well as one-on-one interviews with members. New initiatives for 2010 include a buddy program for new members.

Deputy Practice Leader, Retail/Wholesale Practice Marsh Inc.

Janet Murphy President Ogden Associates, Inc.

Lindsay Parker Director, Global Retail Vertical Solutions Marketing Cisco Systems, Inc.

Frank Riso Senior Director, Retail Industry Solutions Group Motorola

Adel Sayehg President and CEO Universal Surveillance Systems (USS)

Stephen Sparrow Retail Industry Marketing Manager Microsoft Corporation

James R. Tippmann CEO FRCH Design Worldwide

Immediate Past Chair Walter F. Loeb President Loeb Associates

Jay Heavilon, President, ARS Interactive, reviews the results of the “Talk Back to AMAC” feedback with attendees at the 2009 Associate Member “Town Hall” Meeting.

The Courage to Lead: www.nrf.com

NRF 2009

Loss Prevention With the growing recognition by senior management of the critical role LP executives play in retail, there has been an increasing need for programs and activities that can meet the demands of this community and enable them to expand their expertise. NRF has enhanced its LP offerings dramatically in recent years to address these requirements, with more and more LP executives taking advantage of NRF programs.

Premiere Educational and Networking Opportunities The 2009 NRF LP Conference provided a premiere networking and learning event for all levels of LP professionals in all sectors of the retail industry. More than 2,400 LP executives and professionals attended, with expert speakers conducting presentations on: I have participated in the NRF conferences and events from the very beginning (dating back to NRMA of the 1970’s). NRF has proven to be an outstanding resource for information, education, product knowledge, professional development programs and the most important one: peer networking. NRF is the go-to place when you need to know what is happening in our industry and is the most credible and reliable resource in retailing today. Larry Senn VP, Asset Protection The Dress Barn, Inc. (Member Since 1996)

to Manage Generation Y • The Evolving Role of Loss Prevention • Simple Solutions to Protect Independent Retail Stores • How

EXPO Hall – Cutting Edge Technologies Featuring more than 175 leading LP solution providers, the EXPO hall showcased technologies at work. The NRF Fusion Center provided a networking venue while the LP Secure Store, a prototype retail store on the EXPO floor, showcased the integration of numerous LP products and technologies.

Loss Prevention Committees Connecting the Dots and Forging Key Partnerships The Loss Prevention committees were very active in 2009, as follows:

• NRF Investigator’s Network The NRF Investigator’s Network brings together retail LP executives, shopping center security and law enforcement officials to network and discuss critical industry challenges. In 2009, the Investigator’s Network held 13 meetings in seven regions. With more than 1,250 members, these regional meetings have helped connect the dots on key criminal cases throughout the country.

• Joint Organized Retail Crime Task Force In 2009, NRF’s Joint Organized Retail Crime Task Force (JORCTF) announced a key partnership with the Department of Homeland Security’s

National Retail Federation: 2009 Annual Report

Loss Prevention Senior Executive Summit LP professionals descended on Dallas for the Annual NRF Loss Prevention Senior Executive Summit. The high-level event provided for an open exchange of ideas on economic contingency plans, crowd management, recruiting/developing the talent pool, H1N1 pandemic preparedness and other key issues.

U.S. Immigration and Customs Enforcement (ICE), centered around a six month pilot program designed by ICE. The program assesses the threat level of organized retail crime in several cities and worked with the Investigator’s Network, JORCTF and LERPnet to generate leads and information.

LP Committees Expand In October, the NRF LP Advisory Council announced the formation of two new committees: Loss Prevention Diversity Committee and the NRF LP Research Committee. The Diversity Committee will work alongside the Women in LP Caucus to continue forging diversity in the retail LP industry and the Research Committee will coordinate and produce regular benchmarking and survey publications.

LOSS PREVENTION Los Angeles Police Department Chief William Bratton delivered the opening keynote presentation and discussed retail-law enforcement partnerships.

Inside the numbers 92%

Law Enforcement Retail Partnership Network (LERPnet) – Powerful Tool for Retail LP Teams The Law Enforcement Retail Partnership Network (LERPnet) is a secure national database for the reporting of retail theft and serious incidents, allowing retailers to share information with each other and law enforcement. It is fast becoming a national standard for sharing retail crime information in a secure and confidential manner and fighting back against illegal activity including organized retail crime, burglaries, counterfeiting, and online auction fraud. This year, LERPnet launched a direct connection between LERPnet and the FBI’s Law Enforcement Online web portal, LEO.gov, which grants law enforcement officers access to the system. Additionally, GeoMapping Analytical reports were instituted along with regular analysis of LERPnet data by leading law enforcement agencies nationwide.

Percentage of retailers who say their company has been a victim of organized retail crime in the last 12 months

101,000 Number of criminal incidents that have been reported through the Law Enforcement Retail Partnership Network

50% Percentage of “new, in-box” items sold through auction sites that are likely stolen or fraudulently obtained, according to retailers’ estimates

$9.59 Billion Amount of fraudulent returns in 2009

Loss prevention professionals visit with exhibitors on the EXPO Hall Floor at the 2009 LP Conference & EXPO.

Crowd Management As the retail industry continues to offer in-store events for customers, retailers have a new challenge: crowd management. NRF issued a white paper on crowd management guidelines and considerations for retailers that included tips for partnering with mall management and local law enforcement.

This year I brought 11 members of the GameStop Loss Prevention team to the NRF LP Conference in Los Angeles. I believe this is the best industry training and vendor exhibit event in the nation and I want to share it with as many of my team members as possible. I continue to be thankful to NRF for recognizing the need for this event and bringing high quality content for all levels of LP professionals. Tina Sellers VP, Loss Prevention GameStop Corp. (Member Since 2006)

Marcy Forman, Director, Office of Investigations for U.S. Immigration and Customs Enforcement (ICE) announced at the June NRF LP Conference a pilot program between ICE and the NRF’s Joint Organized Retail Crime Task Force. Industry experts inducted into the Ring of Excellence for lifetime achievements in loss prevention and the retail industry. The TheCourage Courageto toLead: Lead: www.nrf.com www.nrf.com

27 27

NRF 2009

INFORMATION TECHNOLOGY It is not possible to overstate the importance of technology in the retail industry. While retailing may drive the economy, technology drives retailing. Whether it is at point of sale, throughout the supply chain, in warehouse management, inventory control, loss prevention, on the Internet or with social media, most successful retailers rely on modern technology.

NRF CIO Council NRF has a long history of recognizing the value of technology and offering members an opportunity to share technology information, best practices, benchmarking or learn about emerging trends. In 2009, NRF’s CIO Council, a community of 50 of the best and brightest IT leaders in the retail industry, met to discuss the issues and challenges faced by retail CIOs including PCI DSS (Payment Card Industry-Data Security Standard), IT governance, technology spending trends, mobile commerce and how retailers are using social networking.

NRF Released 6th Annual Retail IT Budget Study In 2009 NRF’s CIO Council and AMR Research developed and released the 6th Annual Retail IT Budget Study, a comprehensive, retail specific analysis. Since its inception, the combined total revenue of all participating companies in the survey exceeds $820 billion.

NRF letter to PCI Council and credit card companies NRF continued to work to create more transparency and clarity in how data security standards are developed. In 2009, NRF along with several trade associations representing merchants ranging from retail, restaurants and hospitality sent a joint letter to the Payment Card Industry (PCI) Security Standards Council and credit card executives outlining several guidelines that could be implemented immediately that would make PCI more effective and cost efficient.

Retail Technology Summit – Amsterdam The Retail Technology Summit, in its 7th year, is one of the industry’s most influential retail technology events in the European Union. The Summit, produced by NRF and the Association for Retail Technology Standards (ARTS), a division of NRF, in partnership with Germany’s EHI Retail Institute, attracted more than 200 IT executives from the world’s leading retail companies. Retailers from the Netherlands, Germany, United Arab Emirates and France demonstrated how to leverage information technology to prosper in the challenging global economic landscape. The event featured a oneand-a-half-day educational program focusing on how to quickly implement new business strategies by optimizing

National Retail Federation: 2009 Annual Report

Launched in 2004, the Fair Factories Clearinghouse (FFC) is a unique 501(c)(3) membership community of businesses collaborating to use technology to enable cost effective, well-informed ethical business transactions and improved workplaces around the globe. It offers software to its members to manage and share compliance information on factories throughout the world that manufacture consumer products. FFC’s rapidly growing database contains more than 24,000 factories, with compliance data stored on more than 95% of them, with close to 55,000 compliance reports. Members of the FFC include adidas, Burberry, Levis, LL Bean, Nike, Macy’s, Nordstrom, REI, ASICS, J.Crew, Patagonia, Starbucks, and Disney, among others.

IT-support applications. The sessions highlighted speakers on a wide variety of topics that were global, relevant and forward thinking.

INFORMATION TECHNOLOGY

During NRFtech, Hallmark’s Jay Dittman spoke to attendees about marketing ROI and how companies can profitably activate customers.

NRFtech 2009: IT Leadership Summit NRFtech, the retail industry’s most influential event for senior level IT executives was held in La Jolla, CA in 2009. Speakers from Best Buy, PetSmart, Kohl’s, Yum! Brands, Hallmark, PETCO, and Heartland presented topics to more than 150 retail executives. Attendees walked away from the conference with actionable information that could be applied in their companies. Vicki Cantrell, COO and CIO at Tory Burch spoke to NRFtech conference attendees.

NRF’s CIO Council, some of the industry’s most prominent executives, met to discuss data security, the economy, and social networking during NRFtech.

PetSmart Executive Chairman Phil Francis and CIO Don Beaver spoke to NRFtech conference attendees about their company’s IT initiatives.

The Courage to Lead: www.nrf.com

NRF 2009

DIVISIONS

Shop.org, NRF’s digital division, serves as the world’s leading membership community for digital retail with more than 600 member companies. As the authority for addressing emerging growth opportunities in online and multichannel retailing, Shop.org delivers benefits to members through events, research, networking and policy development.

the third annual CyberMonday.com online shopping mall, and raised more than $450,000 for the Ray M. Greenly Scholarship Fund, which was established to encourage students to pursue eCommerce careers. The scholarship fund has raised more than $1.3 million since 2006.

Online Sales Continue to Grow Shop.org’s twelfth annual State of Retailing Online 2009, conducted by Forrester Research, revealed that 2009 online sales, despite the worst economy in 70 years, were expected to grow 11 percent to $156 billion.

Shop.org Research Serves as an Industry Leader The State of Retailing Online (SORO) is an annual look at actual sales, expenses, and industry trends. This benchmark study for the industry also analyzes retailer responses related to multi-channel integration as well as marketing and promotional tactics that are successfully used to improve conversion rates. The eHoliday Study, in partnership with BIGresearch, provides insight into the online holiday shopping season from both retailer and consumer perspectives. The study, now in its eighth year, gave birth to the term “Cyber Monday,” the first Monday after Thanksgiving, after Shop.org determined that online shoppers were flocking to eCommerce websites to shop and place orders on that day. In 2009, Shop.org featured 30

John Donahoe, CEO, eBay, talks online retail ing during the 2009 Annual Summit.

The online retail industry’s mustattend event, Shop.org’s 2009 Annual Summit, was held in Las Vegas in September. Featuring blockbuster keynotes from industry standouts such as Macy’s, Inc. CEO Terry Lundgren and eBay CEO John Donahoe, this event drew a recordbreaking 2,600 industry professionals to explore emerging trends and share best practices. In addition to the content and phenomenal networking opportunities, attendees also took advantage of an exhibit hall showcasing 160 solution providers. Shop.org also featured highly successful smaller events, the Shop.org Online Marketing Workshop in May and the Shop.org Online Merchandising Workshop in July, to help managers and directors increase their skill sets and network with the best in the business.

National Retail Federation: 2009 Annual Report

Shop.org leads DC advocacy efforts Shop.org’s Policy Advisory Group, comprised of executives from approximately 20 Shop.org members, began developing strategies to ensure that the needs of online retailers are taken into consideration as part of an expected debate in Congress about online behavioral targeting. Legislation that could inhibit online marketing practices (present and future) will likely be considered in the next session of Congress. If a law is passed, or if the Federal Trade Commission (FTC) adopts new regulations, online retailers can expect to be required to obtain consent from shoppers before they can collect or apply customer information for use in certain types of marketing practices (such as behavioral targeting). The FTC has already announced a series of privacy workshops to focus on consumer expectations and emerging practices and strategies that began in December. Other issues that Shop.org is following closely include: Internet Corporation for Assigned Names and Numbers’ (ICANN) efforts to expand Generic Top Level Domain Names (gTLDs), credit card interchange fee legislation, the creation of a new Consumer Financial Products Agency (CFPA), data security legislation, and gift card regulations currently being considered by the Federal Reserve.

Attendees walk the EXPO Hall at the 2009 Shop.org Annual Summit in Las Vegas.

CONVENTION AND EXPO Board of Directors Shop.org Chairman

Richard Last

Vice President and Director New Business Development JCP.com J.C. Penney Company, Inc.

Anne Ashbey Formerly VP, Internet Marketing Harry and David

Miki Racine Berardelli CMO Tory Burch

Troy Brown Retail Practice Leader Demandware

Peter Cobb

Hiroshi Mikitani, CEO, Rakuten, takes the podium at the Global E-Commerce Summit.

Shop.org is a unique force within the online retail space. Although Shop.org is best known for hosting first-class events with outstanding networking opportunities throughout the year, I find just as much benefit in their website, emails, social media efforts, and research results. Peter Cobb

Terry Lundgren, CEO, Macy’s, addresses online retailers.

Co-Founder and Senior Vice President eBags (Shop.org Member Since 2003)

Co-founder Senior Vice President eBags

Chuck Davis Chairman and CEO Fandango, Inc.

Patti Freeman Evans Vice President Research Director Forrester Research

Pinny Gniwisch Chief Motivational Officer Ice.com

Brett Hurt Founder and CEO Bazaarvoice, Inc.

John Lazarchic Vice President, Ecommerce PETCO Animal Supplies, Inc.

Misty Locke President & Co-Founder Range Online Media

John McAteer Head of Retail Google Inc.

Kelly Mooney President and Chief Experience Officer Resource Interactive

Gilt Groupe CEO, Susan Lyne, discusses Gilt’s rising success over the past year.

MJ Murphy A retail executive gets advice during the session “The Doctor is In” at the 2009 Annual Summit.

Senior Director Ecommerce Cole Haan

Bob Myers Senior Vice President, Platforms, New Media, Broadcast and Technology QVC, Inc

Dan Springer CEO Responsys

Chris Wilson Avinash Kaushik, author of Web Analytics: An Hour A Day, shares his web insights with the crowd.

VP E-Commerce L.L.Bean, Inc.

Paul Delaoutre, CEO, Galeries Lafayette, speaks at the Global E-Commerce Summit in Monaco. The Courage to Lead: www.nrf.com

NRF 2009

DIVISIONS The OfficeMax Team, led by Bob Thacker (center), SVP, Marketing and Advertising, accepts the Best of the Best Award.

In 2009 RAMA (Retail Advertising and Marketing Association), a division of NRF, continued its mission of providing unique industry research, cutting edge educational programming, and networking opportunities for retail advertising and marketing professionals. NRF members continued to take advantage of the added value of participating in RAMA as a benefit of NRF membership. RAMA takes pride in its tradition of bringing together the best and most creative thinkers in the industry – retail Chief Marketing Officers and industry partners such as ad agencies, design firms, printers and other leaders in the community – to regularly review relevant consumer research and marketing trends.

RAMA Grows Its Member Communications This past year RAMA launched a new website, www.rama-nrf.com, along with a corresponding digital e-newsletter, RAMA Buzz “Listen Up”, that is emailed to RAMA members on a bimonthly basis. These new communications tools enhance RAMA’s ability to connect quickly with its key audiences.

The Annual Retail Advertising Conference Moves to Las Vegas After convening in Chicago for 56 years, in 2009 RAMA moved its annual Retail Advertising Conference to Las Vegas. Themed “Real Stories. Real Solutions. Real Inspiration.” this year’s event attracted the industry’s most cutting-edge, creative minds all to seek solutions to the challenging economy. 32

The lineup of expert speakers and innovators included: • Mike Boylson, EVP and CMO, J.C. Penney Co., Inc. • Bert Jacobs, Founder, Life is good • Stan Lippelman, VP, Marketing, Bass Pro Shops • Chip Wilson, Founder, lululemon athletica The event also featured an EXPO Marketplace filled with supplier and partner exhibits.

RACie Awards Showcase Retail Advertising and Marketing’s Best Creative Work The Retail Award for Creativity, Innovation and Excellence (RACie), the retail industry’s coveted marketing and advertising awards, once again showcased our industry’s most brilliant and creative minds. Honored for their work for the year were Best Buy’s Blue Shirt Corps receiving the Peter Glen Award for Cause Marketing. OfficeMax was selected by the audience as the Best of the Best for their clever “Back to School Penny Pranks,” and the first ever Board of Directors Creative Award was presented to Old Navy for their “I Want Candy” holiday commercial. During the awards gala, Ric West, Divisional VP of Marketing Promotion and Production, Sears Holdings Corp., was inducted into the Retail Advertising Hall of Fame. Don Florence, SVP and Creative Director, Schawk Advertising, was honored with the Lifetime Achievement Award, only the eighth to be given out in RAMA’s 57 year history.

National Retail Federation: 2009 Annual Report

During the Relevant Trends Track at the Retail Advertising Conference, Lori Senecal, President of McCann New York, discusses the social media explosion.

RAMA Honors Don Florence, SVP and Creative Director, Schawk Advertising, with the Lifetime Achievement Award. Lisa Gavales, EVP & CMO of Express, LLC., explores the impact that twittering has had on her marketing efforts during RAMA’s CMO Summit.

The RAMA CMO Summit is one of the must attend conferences of the year. Learning within a small group environment of other CMOs is fantastic. Not only are the speakers and guests great; the time spent sharing issues and opportunities with peers is priceless. Dustin May Director of Marketing Bootlegger (Member Since 2007)

Bert Jacobs, Founder of Life is good, talks to a packed room on how optimism has powered the success of his brand at the 57th Retail Advertising Conference.

Board of Directors Chairman Ed Carroll Jr.

1st Vice Chair Kathy Doyle Thomas

Marketing Director, Regional Brands Best Buy

Dave Gaston President Gaston Advertising

2nd Vice Chair Zain Raj

Laura Gallagher

Nancy Altman SVP, Marketing Premier Salons, Inc.

Retail CMOs and senior marketing executives gathered in Ft. Lauderdale, Florida for two days at RAMA’s annual CMO Summit, part of NRF’s DECISIONMAKER Series. With the current state of the economy at the top of everyone’s mind, attendees used this time to converse with one another and contemplate their strategy for leadership in the new economy. Expert speakers engaged attendees in discussion of current trends and topics, including social media and ecommerce, ROI across channels, and how consumers define value in the current economy.

Manny Palomo

Executive Vice President Half Price Books

Chief Executive Officer Discovery, North America Global Practice Leader- Retail Brands Euro RSCG Worldwide

CMO Summit – Strategy for leadership in the new economy.

Julie Gardner EVP, CMO Kohl’s

Todd Alexander Brand Evangelist EVP Kreber

Ken Banks Consultant KAB Marketing

Judy Biasetti Consultant

Mike Boylson EVP, Chief Marketing Officer J.C. Penney Co., Inc.

Kevin Brown VP, CMO, Home Appliances Sears Holdings Corp.

BJ Bueno Marketing Consultant Nonbox

Frank Castiglione Managing Director LIFT

Greg Clark

Jay Dunn VP, Marketing Lane Bryant

Don Florence SVP, Creative Director Schawk Retail Marketing

Michael Francis

Giovanni Gigliotti

Dave Ratner President Dave’s Soda & Pet City

Kimberly Grabel

Frank Rothing

SVP, Marketing and Advertising Saks Fifth Avenue

Sr Merchandising and Marketing Manager Sears Holdings Corp.

Rob Gruen

Peter Sachse

John Jay

CMO Macy’s, Inc.

Executive Creative Director & Partner Wieden + Kennedy

Peter Schmid Senior VP-Marketing Television Bureau of Advertising

Kent Larsson Consultant The Gordman Group

Ginny Shiverdecker EVP, Managing Director McCann Erickson

Michael Linton Lisa Lucas

Francey Smith

Vice President Pure Red Creative

Managing Director Francey Smith & Associates

Leanne Mattes

Bob Thacker

Vice President, Marketing Relax the Back

SVP, Marketing and Advertising OfficeMax

Dave Thorpe

Director of Marketing Bootlegger

VP, Marketing Giant Tiger Stores

Tony Ueber

VP, Marketing & Administrative Services The Bon-Ton Stores, Inc.

Executive Vice President & Chief Operating Officer Banfield, The Pet Hospital

Mac McDonald

Ric West

Director - Innovative Services SIRS

DVP, Promotion and Production Sears Holdings Corp.

Jack Mullen Senior Vice President, Marketing ShopKo

Tracy Mullin President and CEO National Retail Federation

EVP-Marketing Target Corp Target

Kevin Gardiner

Phillip Odom

Tim White Senior Vice President of Marketing Fashion Bug

Gary Yiatchos Retail Client Advocate Integrative Logic

Audrey Nizen Senior Vice President Creative Services Bloomingdale’s

Principal k. creative marketing

Vice President, Integrated Marketing Communications Sears Holdings Corp.

VP Smarter Planet Field Enablement, Global S&D Marketing & Communications IBM

Colleen Mayer

Brad Davis

Robert Raible

EVP & CMO Express, LLC

Doug Collier

VP, Advertising Dick’s Sporting Goods

SVP Solution Set

Lisa Gavales

Dustin May

Lee Corbett

Mark Pearson

President The Creative Company

VP, Creative Leadership & Process J.C. Penney Co., Inc. VP and Chief Marketing Officer La-Z-Boy

Michael Paulson Director of Bing Shopping Bing Shopping

Board Director Code London, John Brown Group

The Courage to Lead: www.nrf.com

NRF 2009

DIVISIONS

NCCR Provides Leadership to Chain Restaurant Industry The National Council of Chain Restaurants (NCCR), a division of NRF exclusively representing the chain restaurant industry, has worked for more than four decades to provide leadership to the industry by advancing sound public policy for its members. During 2009, NCCR conducted its inaugural Chain Restaurant CEO Leadership Summit in Washington, D.C. attracting 14 of the industry’s

leading chief executives who came together to discuss the major public policy issues affecting their industry. They also took advantage of their time in Washington for strategy development, industry leadership networking, and meetings with Congressional leaders, including Senate Majority Whip Dick Durbin (D-IL). The rousing success of the meeting resulted in plans for two additional summits in March and September, 2010.

NCCR Public Policy Leadership Darden has realized significant value and return on its NCCR/NRF membership investment in the two years since becoming members. NCCR serves as a powerful voice for the chain restaurant industry and has demonstrated its leadership on several key public policy issues. Darden also has benefited greatly from its participation in numerous NRF committees and working groups. Chip Kunde Vice President, Government Affairs Darden Restaurants (Member Since 2008)

Among the urgent public policy issues discussed at the CEO Summit and on which the NCCR Board and staff focused in 2009, were: • Food safety • Card check • Commodity prices • Health care reform • Tax • Sodium • General workplace • Employment policy Additionally, NCCR hosted several legislative lobbying fly-ins for its mem-

Members of the NCCR Board of Directors met during the NCCR Annual Meeting.

National Retail Federation: 2009 Annual Report

bers, including issue-specific lobbying trips for individual member companies. NCCR also significantly increased its grassroots services for member companies, providing them with tailor-made grassroots platforms that can be coordinated with company franchisees. Further, NCCR filed two amicus curiae briefs in court cases involving member companies, the outcomes of which would have significant consequences for the industry. The court cases involved the issues of meal breaks and rest periods and the continued availability of the tip credit for tipped employees.

NCCR Membership Grows In spite of – or perhaps because of – the economic decline, NCCR saw significant membership increases in 2009 as chain restaurant companies recognized the power and importance of collaborative and collective leadership on critical issues. Prominent new members included Bob Evans Farms, Donatos Pizza, O’Charley’s and Wendy’s/Arby’s.

NCCR/NRF has become an integral part of not only our Government Relations program, but has extended its positive impact into several other disciplines at DineEquity including Quality Assurance, Human Resources, and Legal, among others. NCCR/ NRF consistently demonstrates a deep understanding of the public policy issues that are shaping the restaurant industry and activates effective strategies to influence positive outcomes in the legislative and regulatory process. Importantly, NCCR/NRF offers an unmatched forum for chain restaurants to come together to increase our voice as an industry and affect change in positive, proactive ways.

Julie Dunne, partner at the law firm Littler Mendelson, talks about an amicus brief her firm authored for NCCR in a case involving meal breaks and rest periods.

Officers Chairman Patrick Sheehy Cracker Barrel Old Country Store

Vice Chairman Mike Starnes Denny’s Inc.

Treasurer Craig Prusher Burger King Corporation

Secretary Chip Kunde Darden Restaurants, Inc.

Immediate Past Chairman Joe Taylor Brinker International, Inc.

Stacy Roughan

Board Members

Director, Investor Relations DineEquity, Inc.

Donald Balfour

(Member Since 2005)

Vice President Advocacy, Waffle House, Inc.

Paul Carothers NCCR President, Jack Whipple, presented Jamie Richardson, Vice President, Government Relations, White Castle Systems, with the NCCR Ambassador Award during the NCCR Annual meeting dinner. Dr. Samir Sodha of the Centers for Disease Control and Prevention discussed foodborne outbreaks at the NCCR Food Safety Task Force meeting held in conjunction with the NCCR Annual Meeting.

Vice President Government Affairs, Yum! Brands Inc.

Steven Hilton Vice President, Government Relations McDonald’s Corporation

Mike Kull President, Dairy Queen Corporate Stores International Dairy Queen, Inc.

Jerry Lovejoy Senior Vice President and General Counsel El Pollo Loco

Jamie Richardson Vice President, Government Relations White Castle Systems

Stacy Roughan Director, Investor Relations DineEquity

Mary Schell Vice President, Government Relations Wendy’s/Arby’s Group

Cicely Simpson Director, Federal and State Government Relations Dunkin’ Brands

NCCR Board members and members of the Food Safety Task Force gather during NCCR’s Annual Meeting at Dine Equity’s headquarters.

The Courage to Lead: www.nrf.com

NRF 2009

DIVISIONS

The Association for Retail Technology Standards (ARTS) was created in 1993 to enable retailers to purchase the best software available on the market and plug it into their store systems environment without fear of incompatibility or delay due to programming changes. The key to this is through the development of integrated standards tailored to meet the needs of the industry. Since its establishment, ARTS programs and activities have been devoted to improving efficiency and reducing costs for retailers around the world.

identify desired enhancements and potential new standards. Companies speaking on the successful use of ARTS standards included: BJ’s Wholesale Club on PCI best Practices; Reject Shop of Australia on using ARTS XML schemas to implement an ERP on time and within budget; adidas from Germany on using the ARTS request for

First Annual ARTS Users Meeting After 15 years of developing technology standards for the retail industry and providing thousands of downloads for use in more than 80 countries, in 2009 ARTS embarked on a new effort to educate the industry on how to use these standards most effectively. The objectives of the first ARTS Users Meeting were to provide an open forum to discuss challenges and standards-based solutions and to Over the past 7 years, The Reject Shop has used ARTS standards and whitepapers in many business transforming projects, most recently with a successful Enterprise Resource Planning implementation. ARTS has always reduced the complexity which results in time savings and provides a solid foundation for the next round of projects. Geoff Pearce Manager, IT Commercial Systems The Reject Shop Limited (Australia) 36

Richard Mader making opening remarks on Day One of the Users Meeting

proposal (RFP) for POS applications; Easy Homecenter, Colombia/Chile/ Argentina, on following the ARTS SOA Blueprint to implement the first SOAenabled retail store in Latin America; Kroger on improving e-commerce operations through Cloud Computing; and Lowe’s on using the Data Model as a guide to master data management.

Mobile in Retail ARTS is playing a major role in the Mobile in Retail Initiative organized by NRF as a service to members and the industry to guide the implementation of this technology and the related business processes in retail. The purpose of this effort is to gather and present to organizations developing standards, business processes,

National Retail Federation: 2009 Annual Report

Each month I can see the benefits of our interaction with ARTS continue to grow. Internally we were able to kick start the benefits of using ARTS products by holding a full day in-house training program for key members of our development, database administration, and architecture teams. This training session is still remembered and referenced by our teams today. When it comes to receiving an ROI on training it was the deal of the decade. Perry Kramer VP Sales Operations, Corporate, and Distributed Solutions BJ’s Wholesale Club (United States)

applications and devices for mobile commerce, retailer desires and absolute requirements for adoption of mobile technology within their enterprises that will maximize benefits and minimize implementation expense and on-going costs. Initiative participants included members of the NRF CIO Council, ARTS and leading mobile organizations such as GSMA, NACHA, NFC Forum and Smart Card Alliance, and representatives from GS1 and MIT. The first activity of the Initiative is the development of a Mobile Blueprint to guide retailers on business opportunities, security, privacy, infrastructure, payments and promotions. ARTS is leading the development of this guide for implementing mobile applications in retail. To further support mobile in retail, ARTS is updating the digital receipt standard to include electronic coupons and has released a first draft of a payment standard to ease PCI compliance and facilitate mobile payments.

Whitepaper on Cloud Computing In 2009, ARTS published the first Cloud Computing for Retail whitepaper that provides unbiased guidance for achieving optimum benefit of this new technology. Cloud

Breakfast roundtable discussions.

computing can provide great benefits to retailers by using centralized servers that share resources like storage, processing and bandwidth and is paid for on a subscription basis. The software is hosted by the vendor and accessed by the customer over the Internet, with applications rented on an as-needed basis. The ARTS Cloud Computing whitepaper guides retailers on implementation issues: the best retail applications for cloud computing; integrating services at the cloud for stores and enterprise IT; overcoming concerns with availability, reliability and security, supporting an “open cloud” for freedom of choice in applications and vendors; and achieving an ROI.

Standard Request for Proposal (RFP) for Business Intelligence (BI) Also in 2009, ARTS released its Standard Request for Proposal (RFP) for Business Intelligence (BI) Applications, the eighth in a series of Standard RFPs. RFPs assist retailers in selecting the “right” software applications for their specific business processes.

Richard Mader of ARTS and Paul Butka of TJX at networking reception.

Board of Directors Grant Anderson

Tom Litchford

Director, Application Development Academy Sports + Outdoors

Industry Solution Director Microsoft Corporation

Nada Aried

Richard E. Mader

Director, Store Systems Technology Limited Brands

Executive Director Association for Retail Technology Standards

Peter Burrows

John Miles

CIO adidas America, Inc.

VP, Solutions Delivery Lowe’s Companies, Inc.

Jesus Colao

Geoff Pearce

VP, Information Technology Development El Corte Inglés, S.A.

IT Commercial Systems Manager The Reject Shop Limited

Phil DiPietro Director, Engineering NCR Corporation

VP, Application Development and Support The Kroger Co.

Tadashi Furuhata

Jerry Rightmer

Manager, Business System Planning & Design Seiko Epson Corporation

VP, Application Strategy Oracle Retail

Darrell Riekena

Barbara Sanders

Robert Graham

VP, Engineering and Architecture The Home Depot, Inc.

CIO Peek...Aren’t You Curious

Dean A. Sleeper

Tim Hood VP, Chief Solution Architect, Retail SAP AG

Michael Julson

Ms. Kirstin Wright

Perry Kramer VP, Sales Operations, Corporate and Distributed Solutions BJ’s Wholesale Club, Inc.

ARTS Pavilion on NRF Convention exhibit floor.

Richard Smith Managing Director The PCMS Group plc

Chief Technology Officer Escalate Retail

Catherine Lasser

President and CEO AccessVia

Chief Systems Architect Retail Anywhere, Inc.

Cy Young Director, POS Burlington Coat Factory

VP, Industry Solutions and Emerging Business IBM Research Division

Bart McGlothin of Cisco Systems, Darrell Sandefur of The Kroger Co., Viswanath “Sri” Srikanth of IBM and Johanna Koester of IBM discussing Cloud Computing for Retail.

Today’s retail companies must really focus on giving value to the marketplace. ARTS is without a doubt the key piece to building a solid Business–IT Alignment and allows us to successfully design our competitive models for the future. Leonardo Octavio Ramirez Gonzalez Chief Architect, Easy Homecenter, Colombia, Chile, and Argentina The Courage to Lead: www.nrf.com

NRF 2009

The Retail Careers Center website features retail news and information on jobs, training and career advice.

The NRF Foundation is dedicated to providing information for career aspiration and preparation at every level. It provides programs to educate, motivate and inspire professional and personally satisfying careers in retailing, from entry to executive level. Through consistent, industry-developed standards based training, career guidance and communication of key information garnered through research programs, the Foundation is working to create and retain a more competent workforce, skilled in best practices with a long term commitment to the industry.

NRFF and Castle Worldwide Partner on Retail Training Program in China The NRF Foundation, and its longtime certification partner Castle Worldwide, broke new ground in November by announcing an agreement with Greater Business Solutions Global of Beijing (GBS) to deliver retail training and industry credentials in China. The training targets retailers, vocational students and graduates of university programs. All training is based on NRFF’s industry skill standards for retail management, developed with support from the US Department of Labor. The first of three levels of training, Retail Operations Management, is being delivered and is geared to entry-level managers.

The fifth annual Customers’ Choice Awards, which honor retailers across all channels and formats who demonstrate superior customer service, were announced at the Annual Retail Industry Luncheon in January 2009. The Top Ten winners for 2008 were (in order): L.L.Bean, Overstock.com, Zappos.com, Amazon.com, Lands’ End, Newegg.com, JCPenney, QVC, Coldwater Creek, Nordstrom. The awards were sponsored by American Express and the survey was conducted by BIGresearch.

Retail Careers Center, www.nrf.com/ retailcareers, the retail industry’s source for retail career information. The new website features retail news, and information on jobs, training, and career advice. NRFF also created a Retail Careers Facebook group,

New Website Launched Featuring Social Media The Foundation unveiled a new website, www.nrffoundation.com, and a 38

National Retail Federation: 2009 Annual Report

I think NRF University wired was my greatest find ever! I haven’t yet completed my first class, “An Introduction to Retail Management,” but I do plan to continue through the whole Retail Management Training Suite. While the budget for training has been drastically reduced here, the cost of these programs on a course by course basis is very manageable. I hope to have two other store personnel go through the same. Dina Campbell Supervisor QREF Support Services Qualcomm

Twitter account, and a Retail Careers blog. NRFF uses these outlets to form a virtual “community,” spread awareness, and promote the diversity of retail career tracks and opportunities.

New Retail Training Curricula Developed NRF Foundation this year developed a newly formatted curricula package on building critical Retail Management skills. The content is focused on core job functions including Operations, Merchandising, Sales and Service, Human Resources and Financial Reporting. The five new highly interactive instructorled courses are based on validated industry-driven competencies and align with the existing online courses offered through NRF University wired. Together, these courses provide a thorough preparation for the National Professional Certification in Retail Management and for orienting the emerging retail manager to the areas of accountability for their role. Employers, education and workforce system, and individuals continue to use NRFF’s professional certifications and industry-based training, to ensure a retail-ready workforce and encourage growth and performance on the job. NRFF’s eLearning program, NRF University wired, continued to provide quality in the four professional credentials: National Professional Certifications in Customer Service, Sales and Retail Management, and the Professional Retail Business Credential.

Student winners of the American Express/ NRF Foundation Intercollegiate Challenge receive scholarships from Shop.org’s Ray M. Greenly Scholarship Fund at NRF’s BIG Show.

Board of Directors Chairman: Arnold B. Zetcher Former Chairman, Retired The Talbots, Inc.

President and CEO: Tracy Mullin President & CEO National Retail Federation

Secretary and Treasurer: H. James Baum

NRFF and American Express Team to Make Retail Aspirational American Express and NRFF conducted the second annual Intercollegiate Retail Challenge under the aspire2retail banner. The project’s mission is to build awareness of diverse retail career paths by engaging university students in a competitive, collaborative role play, with support from retail mentors, to implement a multi-tiered business strategy. Students from retailing centers at the Universities of Arizona, Florida, Michigan, Pennsylvania and Wisconsin-Madison, and Florida State University participated. They formed cross-university teams to solve a business case aimed at integrating web 2.0 and other social networking tools into online and in-store retailing strategies for a company created by the team. Mentors from JCPenney, Borders, Build-a-Bear, Macy’s, Petco and American Girl provided career information and advice on the project from their perspective. Judges from JCPenney, Kohl’s, Wet Seal, L.L. Bean, Macy’s, Jewelry Television, Twist Image and Ice.com joined American Express and NRFF to decide the winning team, who presented their solution at a Forum during NRF’s BIG Show. Because the aspire2retail scenario was focused on online and multichannel retailing, NRFF added a new facet to this year’s Challenge by collaborating with NRF’s digital division, Shop.org, to provide scholarships to

CEO BGH “Here’s Hallmark” Shops

Melinda Burke Director Terry J. Lundgren Center for Retailing University of Arizona

Paul R. Charron Senior Advisor Warburg Pincus & Company

Student winners of the Intercollegiate Challenge meet with NRF Foundation’s Board Chairman and sponsor, American Express.

Thomas Cody Vice Chair, Legal, HR, Internal Audit, External Affairs Macy’s, Inc.

Robert J. Corliss Partner Linley Capital Partners

Lisa Cowell Executive Vice President Westfield America, Inc.

Marsha Everton President Marsha Everton LLC

NRF Foundation partners exhibit in the NRF Foundation’s Resource Area at NRF’s BIG Show.

Robert A. Glick Chairman and CEO Dots, LLC

the six students on the winning team through the Ray M. Greenly Scholarship Fund.

General Manager, Retail Store Solutions IBM Corporation

Retail Horizons Survey Collides with Downturn

Partner, National Retail Industry Leader KPMG

NRF Foundation and sponsoring partner IBM released the seventh edition of the definitive annual state of the industry report, Retail Horizons: Benchmarks 2008 – Forecasts 2009 at NRF’s BIG Show. The survey and report were prepared by Ogden Associates, Inc. and featured substantial longitudinal comparisons of respondents’ attitudes over the life of the report. In addition, the survey was conducted in the midst of the most turbulent and challenging period retailers had faced in five decades.

Steven D. Ladwig

Mark Larson

Glenda McNeal SVP and GM, Retail and Emerging Industries Team American Express

Daryl Routzahn President & CEO Routzahn’s

Wayne L. Snyder Chairman Wayne Snyder Associates

The Courage to Lead: www.nrf.com

NRF 2009

STORES Media, the publishing and communications group of the National Retail Federation, was created in 2009 to encompass the broad and growing number of communications vehicles now derived from STORES Magazine which has been in print since 1911. STORES Media now includes print, digital and mobile versions of STORES Magazine, STORES.org, STORESnews.org, STORES Knowledge Series, STORES First Edition, STORES LPinformation, STORES Trends, STORES Retail Deals and STORES Show Daily newspapers. STORES Media offerings report on the broad spectrum of strategic issues facing senior retail executives, including: retail technology; supply chain and logistics; credit and payment systems; loss prevention; human resources; online retailing; communications; marketing; merchandising; and other vital store operations.

STORES Magazine is available in print, digital and mobile editions STORES Magazine, NRF’s monthly publication, provides an insider’s view of the entire retail industry by featuring the latest in retail trends, technology and consumer tendencies. Retailers gain access to insightful articles, global coverage of retailing and buying guides with the latest products and services through their STORES subscription. The magazine is viewed by 39,000 subscribers in 80 countries and nearly 8,500 people receive a digital version of STORES via 40

e-mail each month. STORES also offers BlackBerry-, iPhone- and Kindlefriendly versions of the magazine. Of the compelling cover stories STORES highlights each month, some of the highly anticipated annual features include the “Top 100 Retailers,” which ranks companies by revenue and groups them on one chart regardless of the segment in which they operate, and the “Hot 100 Retailers,” a comprehensive list that provides a definitive ranking of the nation’s fastestgrowing retail companies. Additionally, the “Online Favorite 50” reveals a ranking of e-commerce websites as rated by the consumers who use them. All three features have earned coverage in the nation’s leading newspapers and other media.

STORES.org is valuable to leading retail professionals STORES.org is the most visited website that focuses on retail industry news and trends and serves as a valuable resource for leading retail industry professionals, offering important and timely information. In addition to STORES Magazine content, the website features fully interactive versions of all three Buying Guides and exclusive editorial coverage not found in the magazine. More than 56,000 unique visitors access STORES. org each month.

STORESnews.org brings the latest in breaking news Debuting this year, STORESnews.org is devoted to the latest breaking retail news. The website is a news aggregator for industry updates, blogs and more.

STORES Buying Guides aid retailers STORES publishes the Retail Industry Buying Guide, the Software Sourcebook and the Loss Prevention Supplier Directory to help retailers of all sizes and industry segments find the products, services and software applications they need to run a successful enterprise.

National Retail Federation: 2009 Annual Report

STORES Knowledge Series® Through the STORES Knowledge Series, STORES continues to expand its educational content. STORES Knowledge Series is a collection of live, interactive web seminars that give retailers the information necessary to successfully operate their business. Addition-

ally, the webinars give retailers the opportunity to share an open dialog, question the speakers and gain deeper insight. Last year STORES averaged 200 registrants per webinar on an extensive variety of industry topics. Event speakers included executives from leading retail companies, product experts from retail vendors and industry analysts. STORES First Edition, a monthly e-newsletter, provides a first glimpse of the latest issue of the magazine with links to STORES.org, as well as STORES and NRF events taking place in the upcoming month. Another monthly e-newsletter, STORES LPinformation, does much the same, but with a focus on issues pertaining to retail loss prevention. STORES Trends is a monthly e-newsletter highlighting some of the more interesting (and sometimes amusing) trends in retail, as well as STORES and NRF events taking place in the upcoming month. STORES Retail Deals, a semi-monthly e-newsletter, keeps retailers and product

and service providers informed of the latest IT developments, including new hardware and software applications, retail implementations, personnel changes and other important retail IT infomation.

STORES Show Daily Newspapers STORES publishes live Show Daily newspapers for onsite and e-mail distribution at NRFâ&#x20AC;&#x2122;s Annual Convention & EXPO.

The Courage to Lead: www.nrf.com

NRF 2009

Board Committees and Standing Committees Board of Directors The NRF Board of Directors is the governing body that oversees the activities of the Federation.

NRF Contact: Tracy Mullin

Executive Committee The NRF Executive Committee serves as a sounding board for management, to tackle corporate governance issues and to discuss strategic matters in depth that affect NRF’s long term health and direction before presentation to the full Board for discussion and approval. NRF Contact: Tracy Mullin

Finance Committee This committee is elected by the Board of Directors and is one of three standing committees of the Board. It oversees the finances of the Federation including reviewing and recommending the Federation’s budget to the Executive Committee and the Board of Directors. NRF Contact: Carleen Kohut

Advisory Boards, Councils and Committees NRF relies on an interactive committee structure, open to all NRF retail members, for the formulation and execution of policies, guidelines, standards and strategies consistent with retail industry objectives. The NRF committees are, without exception, designed to be representative of the industry and reflect its breadth and diversity. They are comprised of industry specialists in their individual fields who give generously of their time and knowledge to set policy and help develop positions on important retail operations or public policy issues which will benefit the industry at large. Existing to advance the retail industry, NRF councils and committees may engage 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 Force

ARTS Standard RFPs

This is a group comprised of NRF retail members interested in the Americans with Disabilities Act and any resulting or pending federal regulations or litigation.

Through this committee, NRF and ARTS are developing a library of standard RFPs to assist retailers in selecting the “right” software applications for their specific business practices.

NRF Contact: Mallory Duncan 202-626-8106 duncanm@nrf.com

ARTS Board of Directors The ARTS Board identifies standards to be developed, sets program priorities, approves new and revised standards prior to public release and maintains budgetary oversight for the Association for Retail Technology Standards, the retail technology standards division of the National Retail Federation. NRF Contact: Richard Mader 202-774-8217 maderr@nrf.com

ARTS Data Model Committee This committee shapes the future of the ARTS Data Model. Members propose enhancements, prioritize activities and approve all changes to the Model.

NRF Contact: Richard Mader 202-744-8217 maderr@nrf.com

National Retail Federation: 2009 Annual Report

NRF Contact: Richard Mader 202-744-8217 maderr@nrf.com

ARTS Unified Point of Service (POS) UnifiedPOS, the specification for both OPOS and JavaPOS, provides retailers freedom of choice in selecting POS devices from multiple manufacturers while enabling select POS equipment upgrades without total replacement.

NRF Contact: Richard Mader 202-744-8217 maderr@nrf.com

ARTS XML The ARTS XML Committee develops standard XML schemas and message sets that are used to facilitate – and lower the cost of – integration of applications in the retail enterprise. Participation is limited to ARTS members, although both retailers and vendors may participate.

NRF Contact: Richard Mader 202-744-8217 maderr@nrf.com

Compensation Committee NRF’s Compensation Committee was created principally to review the salary and benefits of NRF’s President and CEO in keeping with best practices adopted by many retailers in today’s business environment. NRF Contact: Tracy Mullin

Associate Member Advisory Council (AMAC) This council of Associate Member companies meets annually and via conference call to ensure the needs of NRF’s growing associate member base are met, and to provide feedback to NRF regarding the needs of retailers and how NRF can better meet those needs.

NRF Contact: Denise Brasse 202-626-8124 brassed@nrf.com

CIO Council This is an invitation-only committee made up of retailing’s most prominent chief information officers. It meets in winter, spring and summer to discuss issues of common interest, promising technologies, and to take a proactive stance on creating new technology environments. NRF Contact: Dave Hogan 202-626-8126 hogand@nrf.com

Committee on Employment Law This committee serves as NRF’s technical committee on labor law and employee relations matters, and is comprised of retail industry corporate executives and independent labor counsel, as well as human resource and employee relations executives from NRF member companies and associations.

Awards and Nominations Committee

NRF Foundation Board of Directors

NRF’s Awards and Nominations committee reviews nominations for Directors and members, and prepares slates of nominees for consideration by the Board and for election by the NRF membership. NRF Contact: Tracy Mullin

This Board of Directors, made up of senior executives of major retail and supplier-partner firms, directs and oversees the programs, activities and functions of the NRF Foundation, the non-profit research and education arm of the National Retail Federation. NRF Contact: Kathy Mance

Credit Executives Committee

Financial Executives Council (FEC)

This committee provides NRF with strategic and operational advice related to consumer credit issues, including federal legislative and regulatory policy, the standardized credit bureau reporting format, as well as file integrity among retail credit grantors.

The FEC is comprised of senior financial executives of NRF member companies who work with NRF to develop industry financial benchmarks and serve as advisors for industry advocacy efforts with the FASB, SEC, etc.

NRF Contact: Mallory Duncan 202-626-8106 duncanm@nrf.com

NRF Contact: Carleen Kohut 202-626-8129 kohutc@nrf.com

CRM Exchange (CRMx) This group discusses issues and concerns related to implementing Customer Relationship Management (CRM) initiatives in their companies.

NRF Contact: Mike Gatti 202-626-8117 gattim@nrf.com

European Retail Technology Council This Committee, made up of many of Europe’s most prominent retail IT Directors and CIOs, offers a valuable networking opportunity while also coordinating NRF and ARTS IT activities and guiding ARTS activities in Europe.

NRF Contact: Dave Hogan 202-626-8126 hogand@nrf.com

Forum for International Retail Association Executives The FIRAE seeks to promote the free exchange of information among retail trade associations around the world and works to identify opportunities for cooperation in research and education.

NRF Contact: Steven Glover 202-661-3046 glovers@nrf.com

General Counsel’s Forum This invitation-only Council is limited to the most senior legal officers among NRF’s retail membership. Two to three times each year they meet to share strategy and ideas for addressing cutting-edge legal and management issues of concern to retail law departments.

NRF Contact: Mallory Duncan 202-828-8106 duncanm@nrf.com

NRF Contact: Rob Green 202-626-8195 greenr@nrf.com The Courage to Lead: www.nrf.com

NRF 2009 Gift Card Working Group This working group addresses the rapidly spreading restrictions on the highly popular gift cards offered by many retailers.

Internal Audit and Compliance Council

This council is comprised of senior internal auditors of NRF member com panies. These executives develop and NRF Contact: Maureen Riehl exchange best practices for ensuring 202-626-8121 effective internal controls and maximizing riehlm@nrf.com the effectiveness of the operation, which is accomplished by meeting semi-annually Government Affairs Policy Council The NRF Government Affairs Policy Council and holding conference calls. NRF Contact: Rachel Ryan is the Federation’s principal policy making 202-626-8165 body on federal legislative and regulatory issues. ryanr@nrf.com

NRF Contact: Steve Pfister 202-626-8112 pfisters@nrf.com

Health & Employee Benefits Committee This committee consists of retail benefits managers and directors who provide technical input on a wide range of health, pension and other benefit issues.

NRF Contact: Neil Trautwein 202-626-8170 trautweinn@nrf.com

Human Resources Executives Council This committee of senior human resources executives examines a wide variety of HR issues including compensation and benefits, technology issues that impact HR, diversity, succession planning, training, and more.

NRF Contact: Dan Butler 202-626-8143 butlerd@nrf.com

ID Theft Working Group This working group was created as a result of the Choice Point and Bank of America security breaches, concerns over identity theft [the safety of personally identifiable information (PII)] and the ways in which PII is used by the business community.

NRF Contact: Elizabeth Oesterle 202-626-8109 oesterlee@nrf.com

International Trade Advisory Committee

ITAC – Food Products Subcommittee (NCCR) This subcommittee of the ITAC provides guidance and technical expertise on agricultural trade issues that specifically affect food retailers and chain restaurants.

NRF Contact: Erik Autor 202-626-8104 autore@nrf.com

ITAC – Hardgoods Subcommittee This subcommittee of the ITAC provides guidance and technical expertise on trade issues that specifically affect retailers of consumer products other than textiles and apparel.

ITAC members include senior retail sourcing, compliance, and government relations executives and general counsels responsible for international trade, customs, and international labor issues for their companies both on the legislative and regulatory fronts. ITAC plays a key role in representing the industry’s interests to eliminate U.S. and foreign trade barriers and facilitating trade.

NRF Contact: Erik Autor 202-626-8104 autore@nrf.com

IT Audit Council

ITAC – Supplier Compliance Subcommittee

NRF’s IT Audit Working Group is comprised of senior IT Auditors of NRF retail member companies. Members of this group meet semi-annually to develop and exchange best practices around auditing IT systems in a retail environment.

NRF Contact: Rachel Ryan 202-626-8165 ryanr@nrf.com

ITAC – Customs Subcommittee

ITAC – Softgoods Subcommittee This subcommittee of the ITAC provides guidance and technical expertise on trade issues that specifically affect textiles and apparel retailers.

This subcommittee of the ITAC formulates the industry’s response to concerns involving working conditions in U.S. and inter national manufacturing operations and other ethical sourcing and corporate social responsibility issues.

NRF Contact: Erik Autor 202-626-8104 autore@nrf.com

This subcommittee of the ITAC provides guidance and technical expertise on customs and trade facilitation issues affecting retailers as well as relations between the Bureau of Customs and Border Protection and the importing community.

ITAC – Trade Remedies

NRF Contact: Erik Autor 202-626-8104 autore@nrf.com

National Retail Federation: 2009 Annual Report

This subcommittee of the ITAC provides guidance, technical and legal expertise on antidumping, countervailing duty, safeguards, as well as other trade remedies actions affecting consumer goods.

Membership in the National Retail Federation and participation in the NRF Taxation Committee has proven to be a valuable asset to our company. The ability to network with other companies in the retail tax community provides an invaluable resource in identifying and resolving IRS tax disputes. Being able to participate in the Tax Committee meetings and conference calls allows us to stay current on emerging tax issues and make our feelings known on legislative and tax matters.

James Misplon VP, Tax Sears Holdings Corporation (Member Since 1929)

Loss Prevention Advisory Council This council, composed of senior loss prevention executives from diverse retail sectors, meets frequently to discuss common problems confronting the retail industry and to share new ideas on product and program results. NRF Contact: Rhett Asher

202-626-8139 asherr@nrf.com

LP – Awards and Recognition Committee

ADVISORY BOARDS, COUNCILS AND COMMITTEES LP – Diversity Committee The Diversity Committee was developed to promote inclusion and diversification in the loss prevention industry. NRF Contact: Rhett Asher 202-626-8139 asherr@nrf.com

LP – Education Committee This group of industry professionals was assembled to explore and network with universities and certifications related to the loss prevention field.

NRF Contact: Joseph LaRocca 202-783-7971 laroccaj@nrf.com

NRF Contact: Rhett Asher 202-626-8139 asherr@nrf.com

This group is responsible for the governance of LERPnet, the industry’s secure national database of criminal incidents, and identifying new features and functionality in the system.

LP – Homeland Security Committee The Homeland Security Committee was created to provide loss prevention professionals expedited access to critical information on weather emergencies, man made crises like active shooters and terrorist attacks as well as other updates on Homeland Security.

NRF Contact: Rhett Asher 202-626-8139 asherr@nrf.com

LP – Investigator’s Network This group of over 1,250 loss prevention professionals and federal, state and local law enforcement officials serves as a first alert network to share information about criminal activity affecting retail.

The Awards and Recognition Committee develops initiatives to honor and recognize law enforcement professionals/agencies and loss prevention/asset protection professionals.

NRF Contact: Ron Akins 202-661-3040 akinsr@nrf.com

NRF Contact: Rhett Asher 202-626-8139 asherr@nrf.com

LP – Joint Organized Retail Crime Task Force

LP – Conference Planning Committee The Conference Planning Committee works to develop topics and content for the NRF annual loss prevention conference.

NRF Contact: Rhett Asher 202-626-8139 asherr@nrf.com

LP – Legislative Committee This group was developed to help identify and establish LP priorities and to set the legislative agenda of the LP community. In addition, this subcommittee compiles statistics and anecdotal information as background for potential congressional testimony.

The Joint Organized Retail Crime Task Force (JORCTF) has a primary focus of developing standard training and awareness programs for retail loss prevention professionals and law enforcement officers.

NRF Contact: Joseph LaRocca 202-783-7971 laroccaj@nrf.com

LP – LERPnet Steering Committee

NRF Contact: Angélica Rodríguez 202-626-8142 rodrigueza@nrf.com

LP – Research Committee The Research Committee spearheads the annual Organized Retail Crime and Return Fraud surveys, along with benchmarks and white papers.

NRF Contact: Rhett Asher 202-626-8139 asherr@nrf.com

LP – Women in Loss Prevention Caucus This subcommittee of the Loss Prevention Advisory Council meets annually and by conference call quarterly to discuss the issues that women face in advancing their careers in retail loss prevention.

NRF Contact: Angélica Rodríguez 202-626-8142 rodrigueza@nrf.com

NCCR Animal Welfare Steering Committee This is an invitation-only committee comprised of regulatory affairs executives tasked with monitoring animal welfare activism, on-farm audits, and animal handling standards in the chain restaurant industry.

NRF Contact: Jack Whipple 202-626-8187 whipplej@nrf.com

The Courage to Lead: www.nrf.com

NRF 2009 NCCR Board of Directors The NCCR Board of Directors is the governing body that oversees the activities of the National Council of Chain Restaurants.

NRF Contact: Jack Whipple 202-626-8187 whipplej@nrf.com

NCCR Employment / HR Group This special interest group of chain restaurant human resource executives meets in conjunction with the NRF Human Resource Executives Council (HREC) to address labor/management issues.

NRF Contact: Scott Vinson 202-661-3059 vinsons@nrf.com

NCCR Food Products Subcommittee This subcommittee of the NRF International Trade Advisory Council provides guidance and technical expertise on agricultural trade issues that specifically affect food retailers and chain restaurants.

NRF Contact: Scott Vinson 202-661-3059 vinsons@nrf.com

Privacy Committee

L.J. Mohan

Payment Systems Task Force This Task Force meets as needed to discuss matters pertaining to card acceptance and issues pertaining to retailer relationships with the credit and debit card associations and card acceptance networks. NRF Contact: Mallory Duncan 202-626-8106 duncanm@nrf.com

Postal Working Group This working group provides guidance to the NRF in representing retailers on matters before Capitol Hill, the Postal Rate Commission and the United States Postal Service.

The Privacy Committee is composed of senior retail representatives with responsibility for aspects of company operations that affect customer and employee privacy.

NRF Contact: Mallory Duncan 202-626-8106 duncanm@nrf.com

Vice President - Facilities Management & Energy Engineering Polo Ralph Lauren Corporation (Member Since 2002)

RAMA Board of Directors

NRF Contact: Jack Whipple 202-626-8187 whipplej@nrf.com

This committee communicates existing and potential product safety problems within the retail industry and addresses emerging product safety issues by providing substantive and strategic input into the development of industry public policy.

The RAMA Board of Directors provides overall direction and leadership in the retail marketing community. Comprised of both senior level retail marketing executives and industry partners, the RAMA Board of Directors addresses critical issues facing retail marketers and works together to bring solutions to the challenges they face.

NRFF Education and Advancement Committee

NRF Contact: Jonathan Gold 202-626-8193 goldj@nrf.com

NRF Contact: Mike Gatti 202-626-8117 gattim@nrf.com

RAMA Awards Committee Responsible for the RACie Awards night, this committee works together throughout the year to develop every aspect of the evening, including the entry form, the judging process and the awards night presentation. The committee also selects the winners for NRFâ&#x20AC;&#x2122;s annual awards.

RAMA Commerce Committee

NCCR Food Safety Task Force This task force is comprised of designated representatives from NCCR member food service companies, normally quality assurance, food safety or technical service staff.

Retail industry experts are invited to join this group to advise NRFF on activities involving skill standards, assessment and certification, curriculum and training materials, development of career tracks for distance learning programs and career/ industry awareness activities and youth recruitment.

NRF Contact: Kathy Mance 202-626-8111 mancek@nrf.com

NRF Contact: Elizabeth Oesterle 202-626-8109 oesterlee@nrf.com

Membership in the NRF Sustainable Retailing Consortium (SRC) provides us with the latest trends and practices in green retailing. The working councils, subcommittees, webinars, and conference calls continually address diverse sustainability aspects ranging from energy efficiency, public policy and regulatory compliance, as well as the latest research in constantly evolving consumer buying patterns for green products and services. Sharply focusing on green cost reduction initiatives and revenue enhancing strategies that enhance shareholder value; NRF has provided members like me an excellent roadmap for the development of a comprehensive companywide sustainability strategy.

Product Safety Committee

NRF Contact: Kelly Gilmore 217-546-7110 gilmorek@rama-nrf.com

National Retail Federation: 2009 Annual Report

The goal of this committee is to facilitate relationship building among attendees at RAMAâ&#x20AC;&#x2122;s Retail Advertising Conference. Comprised of RAMA Board Members, from both the retailer and the supplier side, this group works to bring commerce to the forefront of RAMA events. The plan is to create time, space, opportunity, and networking activities that facilitate these opportunities.

NRF Contact: Kelly Gilmore 217-546-7110 gilmorek@rama-nrf.com

ADVISORY BOARDS, COUNCILS AND COMMITTEES RAMA Executive Committee The RAMA Executive Committee, comprised of senior level retail marketing executives, is responsible for identifying research, education and information needs of retail marketers and advertisers. They review and provide input and direction on various programs and participate in RAMA’s annual CMO Summit. The Chairman of the Board of Directors presides over the RAMA Executive Committee.

RAMA Research Committee Focusing on research development for RAMA, this committee works to identify and answer leading key consumer and marketer questions. NRF Contact: Kelly Gilmore 217-546-7110 gilmorek@rama-nrf.com

NRF Contact: Mike Gatti 202-626-8117 gattim@nrf.com

Real Estate Executives Council This council is comprised of the most senior-level real estate executives of NRF retail member companies to explore changes and developments in the marketplace.

RAMA Growth Initiatives Committee

NRF Contact: Carleen Kohut 202-626-8129 kohutc@nrf.com

This committee is responsible for ongoing programs designed to support retail marketers and inspire innovative solutions to industry challenges.

NRF Contact: Mike Gatti 202-626-8117 gattim@nrf.com

RAMA International Committee This committee assists in working to make RAMA more relevant to the international community, therefore increasing membership, and bringing more international content to events.

NRF Contact: Mike Gatti 202-626-8117 gattim@nrf.com

RAMA Networking & First Timer’s Committee This committee is responsible for increasing the value of attending RAMA events, as well as for creating new networking opportunities for conference attendees. In addition this committee reaches out to RAC first time attendees pre-and post-conference, as well as during the conference.

NRF Contact: Megan Zatko 202-661-3052 zatkom@nrf.com

State Association Council SAC membership comprises the state retail associations that are most active in protecting their members’ interests in both the state and national public policy arena.

NRF Contact: Maureen Riehl 202-626-8121 riehlm@nrf.com

Strategic Supply Chain Council This working group of the ITAC and the NRF Loss Prevention Committee includes senior retail executives responsible for global supply chain, transportation, and logistics. The SSCC provides guidance and technical expertise on issues affecting retailers’ management and security of their international supply chains, with a focus on public policy, technology, supply chain management tools and best practices.

Tax – Streamlined Sales Tax Working Group This group is a combination of tax and government affairs experts working in tandem with the state retail associations and governments to modernize and simplify state sales tax systems in the U.S.

NRF Contact: Maureen Riehl 202-626-8121 riehlm@nrf.com

Tax – WOTC Working Group This working group is comprised of corporate Work Opportunity Tax Credits (WOTC) administrators and meets by conference call to discuss specific program procedures and updates when necessary. NRF Contact: Rachelle Bernstein 202-626-8168 Bernsteinr@nrf.com

Tax Reform Working Group The NRF’s Tax Reform Working Group examines various tax reform alternatives under consideration by the President’s Advisory Panel and Congress with respect to their impact on retailers. NRF Contact: Rachelle Bernstein 202-626-8168 bernsteinr@nrf.com

TAX – Private Label Task Force The task force is comprised of tax executives from NRF member companies with concerns over IRS attempts to classify retailers as producers when they contract with third parties to produce private label goods for sale in the retailers’ stores.

NRF Contact: Jonathan Gold 202-626-8193 goldj@nrf.com

NRF Contact: Rachelle Bernstein 202-626-8168 bernsteinr@nrf.com

Sustainable Retailing Consortium

Taxation Committee

The Sustainable Retailing Consortium brings together retailers, manufacturers, vendors, and organizations that are engaged in sustainable (green) retailing efforts.

This committee is comprised of senior tax executives of NRF retail member companies. The committee examines tax legislative and regulatory policies that affect retailers and recommends policy positions for the NRF to try to achieve through their lobbying efforts.

NRF Contact: Dan Butler 202-626-8143 butlerd@nrf.com

NRF Contact: Rachelle Bernstein 202-626-8168 bernsteinr@nrf.com

The Courage to Lead: www.nrf.com

NRF 2009

Financial Overview Source of Funds

Member Dues

Member Programs

20%

64%

Non Dues REVENUES

80% Revenue Producing Programs

36% For every $1 of dues collected

National Retail Federation: 2009 Annual Report

Members get $3 worth of services

Use of Funds

THE COURAGE TO LEAD 2009 ANNUAL REPORT

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