"A key driver to increasing market share is to invest in newstores," said Blake Nordstrom, president. "This investmentcontinues to be the most productive use of capital. And with strongmargins, cash flow, and a healthy balance sheet, our financialposition allows us to capitalize on good real estate."

In the third quarter, the company plans to open full-line storesin Thousand Oaks, CA; Indianapolis; Naples, FL; and Pittsburgh. Aunit in Tacoma, WA; will be relocated in October. Four new Rackdiscount stores will open in White Plains, NY; Laguna Hills, CA;Naperville, IL; and Lyndhurst, OH. Future openings include afull-line store at Santa Monica (CA) Place and Rack units at theBeverly Connection in Los Angeles and Orland Place in Chicago.

For the quarter, total sales were $2.29 billion, down 4.3% fromthe same period last year. Same-store sales decreased 6%. Netearnings were $143 million, compared with earnings of $180 millionlast year. Full-line stores saw a same-store sales decline of 9%,while value-oriented Nordstrom Rack comps rose 6.3%. Internet salesrose 14.6%. Nordstrom operates 159 U.S. stores located in 28 statesunder the Nordstrom, Nordstrom Rack and Jeffrey names.