Mercantile Stores Co Inc – ‘10-K’ for 2/1/97

As of:  Wednesday, 4/30/97   ·   For:  2/1/97   ·   Accession #:  64923-97-6   ·   File #:  1-03339

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                          9     40K 
 2: EX-10       1996 Stock Option Plan                                 8±    33K 
 3: EX-13       Registrant Annual Report                              35    130K 
 4: EX-21       Subsidiaries of Registrant                             1      7K 
 5: EX-23       Consent of Public Accountants                          1      5K 
 6: EX-24       Power of Attorney                                      1      7K 
 7: EX-27       Financial Data Schedule                                1      9K 

10-K   —   Annual Report
Document Table of Contents

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UNITED STATES                           
SECURITIES AND EXCHANGE COMMISSION      
Washington, D.C. 20549                  

FORM 10-K                               

     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
X              OF THE SECURITIES EXCHANGE ACT OF 1934                 
  For the fiscal year ended February 1, 1997

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934  
For the transition period from     to   

   Commission file number 1-3339
   MERCANTILE STORES COMPANY, INC.
(Exact name of registrant as specified in its charter)  

Delaware                              51-0032941      
(State or other jurisdiction of incorporation) (I.R.S. Employer               
                                             Identification No.)

9450 Seward Road, Fairfield, Ohio                 45014               
(Address of principal executive offices)            (Zip Code)                

Registrant's telephone number, including area code  (513) 881-8000          

Securities registered pursuant to Section 12(b) of the Act:     

                                  Name of each exchange on
Title of each class                    which registered   
Common stock $.14 2/3 par value    The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:   NONE      

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange Act      
of 1934 during the preceding 12 months (or for such shorter period that the     
registrant was required to file such reports), and (2) has been subject to      
such filing requirements for the past 90 days.                                  
Yes  X    No                  

Indicate by check mark if disclosure of delinquent filers pursuant to           
Item 405 of Regulation S-K is not contained herein, and will not be             
contained, to the best of the registrant's knowledge, in definitive proxy       
or information statements incorporated by reference in Part III of this         
Form 10-K or any amendment to this Form 10-K.  [ X ]                            

The aggregate market value of the Company's voting stock held by                
non-affiliates based on the closing price on the New York Stock Exchange        
at April 28, 1997 was $1,039,767,600.                                           

The number of shares outstanding of the registrant's common stock,              
$.14 2/3 par value was 36,770,750 at April 28, 1997.                            

DOCUMENTS INCORPORATED BY REFERENCE     

1. Portions of Registrant's 1996 Annual Report to Stockholders are              
incorporated into Parts I, II and III.                                    
2. Portions of Registrant's Proxy Statement, dated April 29, 1997, relating     
to the Annual Meeting of Stockholders to be held on May 28,1997 filed     
pursuant to Regulation 14A, are incorporated by reference into Parts I    
and III of this Form 10-K.                                                

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PART I                              

Item 1.    Business.                                                            

Mercantile Stores Company, Inc.  ("Company" or "Registrant") was incorporated   
under the laws of the State of Delaware on January 10, 1919. The Company is     
listed on the New York Stock Exchange (NYSE designation of MST) and is          
engaged in general merchandise department store retailing.                      

The Company's business is highly competitive.  The Company's retailing          
strategy is to cater to middle and upper income customers by carrying wide      
assortments of national brand items and goods sold under the Company's          
private labels, with emphasis on apparel, accessories and fashion home          
products.  Its stores compete with other national, regional and local retail    
establishments, including department stores, mass merchants, specialty          
stores and discount stores which carry similar lines of merchandise.  The       
Company's competitive methodology focuses on value, customer service,           
fashion, selection, marketing and store location.                               

The retail business is highly seasonal.  The fourth quarter, which includes     
the Christmas season, is the most significant selling period.  For the year     
ended February 1, 1997, the fourth quarter accounted for approximately 33%      
of consolidated retail sales and 52% of consolidated net income.                

The Company regularly employs, on a full or part-time basis, an average of      
approximately 34,300 associates, of which approximately 19,800 are considered   
full-time equivalents.                                                          

The following portions from the Registrant's Annual Report to Stockholders      
for the fiscal year ended February 1, 1997 are incorporated herein by           
reference: Financial Highlights (page 1); Management's Discussion and           
Analysis (pages 11-14); Note 1 (pages 21-22), Note 2 and Note 3 (page 22)       
of Notes to Consolidated Financial Statements; Five-Year Selected Financial     
Data (pages 30-31); Store Divisions and Locations (pages 32-33).                

Item 2.    Properties.                                                          

The Company's typical store averages 170,000 square feet. These stores are      
located in seventeen different states and operate under thirteen                
different names.  The following table summarizes the property ownership         
and applicable square footage of the one hundred and two department stores      
and fifteen home fashion stores operated by the Company as of                   
February 1, 1997:                                                               

              Home
               Department     Fashion         Square
                 Stores         Units          Footage
Owned Stores                 60             2           9,629,032         
Leased Stores                42            13           7,652,960         
Total                       102            15          17,281,992         

Management's Discussion and Analysis (pages 11-14), Note 1 (pages 21-22) of     
Notes to Consolidated Financial Statements and Store Divisions and Locations    
(pages 32-33) from the Registrant's Annual Report to Stockholders for the       
fiscal year ended February 1, 1997 are incorporated herein by reference.        

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Item 3.    Legal Proceedings.                                                   

Information required by Item 3 is incorporated herein by reference to Note      
10 of Notes to Consolidated Financial Statements (page 28) from the             
Registrant's Annual Report to Stockholders for the fiscal year ended            
February 1, 1997.                                                               

Item 4.    Submission of Matters to a Vote of Security Holders.                 

None.                                                                           

PART II                 

Item 5.    Market for Registrant's Common Equity and Related Stockholder        
Matters.                                                  

Market and Dividend Information (page 15) and Stockholder Information           
(inside back cover) from the Registrant's Annual Report to Stockholders         
for the fiscal year ended February 1, 1997 are incorporated herein by           
reference.                                                                      

Item 6.    Selected Financial Data.                                             

The Five-Year Selected Financial Data (pages 30-31) and Notes to Consolidated   
Financial Statements (pages 21-28) from the Registrant's Annual Report          
to Stockholders for the fiscal year ended February 1, 1997 are incorporated     
herein by reference.                                                            

Item 7.    Management's Discussion and Analysis of Financial Condition and      
Results of Operations.        

Management's Discussion and Analysis (pages 11-14) and Notes to Consolidated    
Financial Statements (pages 21-28) from the Registrant's Annual Report          
to Stockholders for the fiscal year ended February 1, 1997 are incorporated     
herein by reference.                                                            

Item 8.    Financial Statements and Supplementary Data.                         

The Consolidated Financial Statements (pages 17-20), Notes to Consolidated      
Financial Statements (pages 21-28), Report of Independent Public Accountants    
(page 16), which includes an explanatory paragraph that describes the change    
in the methods of accounting for long-lived assets discussed in Note 2 and      
accounting for postemployment benefits discussed in Note 8 of Notes to          
Consolidated Financial Statements, and Quarterly Results (page 29) from the     
Registrant's Annual Report to Stockholders for the fiscal year ended            
February 1, 1997 are incorporated herein by reference.                          

Item 9.    Changes in and Disagreements with Accountants on Accounting          
and Financial Disclosures.                          

None.                                                                           

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PART III                          

Item 10.   Directors and Executive Officers of the Registrant.                  

The information set forth under the captions "Election of Directors", "Stock    
Ownership of Management", "Other Executive Officers" and "Section 16(a)         
Beneficial Ownership Reporting Compliance" included in the Registrant's         
definitive Proxy Statement, dated April 29, 1997, relating to the Annual        
Meeting of Stockholders to be held on May 28, 1997 and filed pursuant to        
Regulation 14A, is incorporated herein by reference.                            

Item 11.   Executive Compensation.                                              

The information set forth under the caption "Management Remuneration",          
included in the Registrant's definitive Proxy Statement, dated April 29, 1997,  
relating to the Annual Meeting of Stockholders to be held on May 28, 1997       
and filed pursuant to Regulation 14A, is incorporated herein by reference.      
Notwithstanding the foregoing, the information set forth under the captions     
"Report of the Compensation Committee" and "Performance Graph" in said Proxy    
Statement, is not incorporated herein by reference or in any other filing of    
the Registrant.                                                                 

Item 12.  Security Ownership of Certain Beneficial Owners and Management.       

The information set forth under the captions "Stock Ownership of Management"    
and "Stock Ownership of Certain Beneficial Owners" included in the              
Registrant's definitive Proxy Statement, dated April 29, 1997, relating to      
the Annual Meeting of Stockholders to be held on May 28, 1997 and filed         
pursuant to Regulation 14A, is incorporated herein by reference.                

Item 13.   Certain Relationships and Related Transactions.                      

The information set forth under the caption "Transactions with Management       
and Others" included in the Registrant's definitive Proxy Statement, dated      
April 29, 1997, relating to the Annual Meeting of Stockholders to be held       
on May 28, 1997 and filed pursuant to Regulation 14A, is incorporated herein    
by reference.                                                                   

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PART IV                     

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.     

A.  1.  The following Consolidated Financial Statements of Mercantile Stores    
    Company, Inc., Notes to Consolidated Financial Statements and Report
of Independent Public Accountants, from the Registrant's Annual 
 Report to Stockholders for the fiscal year ended February 1, 1997
are incorporated herein by reference:                           

     (a) Statements of Consolidated Income and Retained Earnings for
             the fiscal years ended February 1, 1997, February 3, 1996 and
January 28, 1995 - page 17.                     

(b) Consolidated Balance Sheets as of February 1, 1997 and
February 3, 1996 - pages 18 and 19.             

    (c) Statements of Consolidated Cash Flows for the fiscal years
ended February 1, 1997, February 3, 1996 and    
January 28, 1995 - page 20.                     

   (d) Notes to Consolidated Financial Statements - pages 21-28.

     (e) Report of Independent Public Accountants, which includes an
      explanatory paragraph that describes the change in the
        methods of accounting for long-lived assets discussed in
           Note 2 and accounting for postemployment benefits discussed
       in Note 8 of Notes to Consolidated Financial Statements
page - 16.                                      

2.  Financial Statement Schedules of the Registrant and Consolidated    
Subsidiaries included herein:                     

  (a) Report of Independent Public Accountants on the schedule
listed below.                                   

(b) Schedule II -  Valuation and Qualifying Accounts      

All other schedules have been omitted as they are inapplicable or the           
information required is shown in the Consolidated Financial Statements or       
the Notes thereto.                                                              

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3.  Exhibits:                                                           

 (3a)-   The Restated Certificate of Incorporation of Mercantile
             Stores Company, Inc., as amended, is incorporated herein by
           reference from the Registrant's  Form 10-K for the fiscal
year ended January 31, 1989.                  

      (3b)-   The Registrant's Bylaws, as amended, are incorporated herein
      by reference from the Registrant's Form 10-K for the
fiscal year ended January 31, 1989.           

    (4)-    The Indenture agreement between Mercantile Stores Company,
      Inc. and  The Fifth Third Bank, as Trustee, dated as
            of July 1, 1992, is incorporated  herein by reference from
  Registration Statement No.33-50604, Exhibit 4.1.

* (10.a)- The Form of Severance Protection Agreement, dated as of 
           May 1, 1995, between David L. Nichols and the Company, is
         incorporated herein by  reference from the Registrant's
       Form 10-K for the fiscal year ended February 3, 1996.

* (10.b)- The Form of Severance Protection Agreement, dated as of 
    May 1, 1995, between the Company and each of James
       M. McVicker, and Randolph L. Burnette,is incorporated
         herein by reference from the Registrant's Form 10-K for
the fiscal year ended February 3, 1996.       

* (10.c)- Mercantile Stores Company, Inc. 1996 Stock Option Plan. 

       (13)-   The Registrant's Annual Report to Stockholders for the fiscal
year ended February 1, 1997.                  

(21)-   A listing of the subsidiaries of the Registrant.      

(23)-   Consent of Independent Public Accountants.            

(24)-  Power of Attorney.                                   

(27)-  Financial Data Schedule.                             
-----------------                                                               
* - Management contract or compensatory plan.                                   

B. No reports on Form 8-K have been filed during the fourth quarter of the      
fiscal year ended February 1, 1997.                                       

Pursuant to the requirements of Section 13 or 15(d) of the Securities           
Exchange Act of 1934, the Registrant has duly caused this report to be          
signed on its behalf by the undersigned, thereunto duly authorized.             

                             MERCANTILE STORES COMPANY, INC.
                          (Registrant)

                        BY:      s/ David L. Nichols
                                David L. Nichols
                               Chairman of the Board

Date: April 30, 1997.                                                           

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Pursuant to the requirements of the Securities and Exchange Act of 1934, this   
report has been signed below by the following persons on behalf of the          
Registrant and in the capacities and on the dates indicated:                    

s/   David L. Nichols                                                 
---------------------------                 ---------------------     
David L. Nichols                          * Thomas J. Malone      
(Chairman of the Board)                          (Director)             
As Principal Executive Officer                                              

s/  James M. McVicker                                                 
---------------------------                 ---------------------     
James M. McVicker                         * Lawrence R. Pugh      
(Senior Vice President and                     (Director)           
Chief Financial Officer)                                        

---------------------------                 ---------------------     
* John A. Herdeg                            * Gerrish H. Milliken     
(Director)                                  (Director)        

---------------------------                 ---------------------     
* Roger K. Smith                            * Minot K. Milliken       
(Director)                                  (Director)        

---------------------------                 ----------------------    
* Roger Milliken                            * H. Keith H. Brodie, MD  
(Director)                                   (Director)       

---------------------------                                           
* Francis G. Rodgers                                                  
(Director)                                                    

* BY:     s/  David L. Nichols                                        
---------------------------------                                     
David L. Nichols                            

Date: April 30, 1997                                                            

An original Power of Attorney authorizing David L. Nichols, James M. McVicker   
and William A. Carr and each of them to sign this report hereto as Attorneys    
for Directors of the Registrant is being filed concurrently with the Registrant 
is being filed concurrently with the Securities and Exchange Commission.        

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Report of Independent Public Accountants                    

To the Stockholders and Board of Directors of Mercantile Stores Company, Inc.:  

We have audited in accordance with generally accepted auditing standards,       
the consolidated financial statements included in Mercantile Stores Company,    
Inc.'s annual report to stockholders incorporated by reference in this Form     
10-K, and have issued our report thereon dated April 1, 1997.  Our audit was    
made for the purpose of forming an opinion on those statements taken as a       
whole.  The schedule listed under Part IV, Item 14(A)(2)(b) is the responsi-    
bility of the Company's management and is presented for purposes of complying   
with the Securities and Exchange Commission's rules and is not a part of the    
basic financial statements.  This schedule has been subjected to the auditing   
procedures applied in the audit of the basic financial statements and, in our   
opinion, fairly states in all material respects the financial data required to  
be set forth therein in relation to the basic financial statements taken as a   
whole.                                                                          

Cincinnati, Ohio                                 ARTHUR ANDERSEN LLP            
April 1, 1997                                                                 

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 MERCANTILE STORES COMPANY, INC.
SCHEDULE  II  
   VALUATION AND QUALIFYING ACCOUNTS
(dollars in thousands)  

                                                        [Enlarge/Download Table]


Column A          Column B        Column C - Additions      Column  D       Column E  
                  Balance at      Charged to  Charged to    Deductions      Balance at
                  beginning       costs       and other     write offs net  end of    
Description       of period       expenses    accounts      of recoveries   period    

Allowance for Doubtful Accounts:                                                      
                                                                                      
Year Ended                                                                            
February 1, 1997  $16,499        $16,817     $0              $16,891        $16,425   

Year Ended                                                                            
February 3, 1996  $ 3,100        $20,282     $0              $ 6,883        $16,499   

Year Ended                                                                            
January 28, 1995  $0             $ 1,462     $ 3,130 (A)     $ 1,492       $ 3,100    

         Note:                                                                        
          (A) - Prior to November 1993, the Company sold all Maison Blanche           
                (MB) customer receivables to MB Funding Trust, an unaffiliated        
                company.  This agreement was terminated during fiscal 1994.           
                Upon completion of the termination process, the customer              
                receivables, net of an allowance for doubtful accounts,               
                were transferred to the Company from MB Funding Trust.                

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		5/28/97		4
Filed on:		4/30/97		6		7
		4/29/97		1		4
		4/28/97		1
		4/1/97		8
For Period End:		2/1/97		1		9			DEF 14A
		2/3/96		5		9			10-K,  DEF 14A
		5/1/95		6
		1/28/95		5		9			10-K
		7/1/92		6
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