DILLARD DEPARTMENT STORES INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended February 3, 1996

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ____________ to _________________.

Commission file number 1-6140

DILLARD DEPARTMENT STORES, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 71-0388071
(State or other (IRS Employer
jurisdiction of incorporation Identification or
organization) Number)

1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:
(501) 376-5200

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

Title of each Class Name of each exchange on which registered
Class A Common Stock New York Stock Exchange

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

None

Indicate by checkmark 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 checkmark 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 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. [ ]

State the aggregate market value of the voting stock held by
non-affiliates of the Registrant as of March 29, 1996:
$3,664,270,540

Indicate the number of shares outstanding of each of the
Registrant's classes of common stock as of March 29, 1996:
Class A Common Stock, no par value 109,270,507
Class B Common Stock, no par value 4,016,929

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Stockholders Report for the fiscal
year ended February 3, 1996 (the "Report") are incorporated
by reference into Parts I and II.

Portions of the Proxy Statement for the Annual Meeting of
Stockholders to be held May 18, 1996 (the "Proxy Statement")
are incorporated by reference into Part III.

PART I

ITEM 1. BUSINESS.

General

Dillard Department Stores, Inc. ("Company" or
"Registrant") is an outgrowth of a department store
originally founded in 1938 by William Dillard. The
Company was incorporated in Delaware in 1964. The
Company operates retail department stores located
primarily in the southwest, southeast and midwest.

The department store business is highly competitive.
The Company has several competitors on a national and
regional level as well as numerous competitors on a
local level. Many factors enter into competition for
the consumer's patronage, including price, quality,
style, service, product mix, convenience and credit
availability. The Company's earnings depend to a
significant extent on the results of operations for the
last quarter of its fiscal year. Due to holiday buying
patterns, sales for that period average approximately
one-third of annual sales.

For additional information with respect to the
Registrant's business, reference is made to information
contained on page 19, under the heading "Dillard's
Locations," page 22 under the headings "Net Sales,"
"Net Income," "Total Assets" and "Number of Employees -
Average," and page 40 of the Report, which information
is incorporated herein by reference.

Executive Officers of the Registrant

The following table lists the names and ages of all
Executive Officers of the Registrant, the nature of any
family relationship between them, and all positions and
offices with the Registrant presently held by each
person named. All of the Executive Officers listed
below have been in managerial positions with the
Registrant for more than five years.

Name Age Position and Office Family Relationships

William Dillard 81 Chairman of the Board; Father of William
Chief Executive Officer Dillard, II, Drue
Corbusier, Alex
Dillard and Mike
Dillard

William Dillard, II 51 Director; President Son of
& Chief Operating Officer William Dillard

Alex Dillard 46 Director; Executive Son of
Vice President William Dillard

Mike Dillard 44 Director; Executive Son of
Vice President William Dillard

H. Gene Baker 57 Vice President None

G. Kent Burnett 51 Vice President None

Drue Corbusier 49 Director; Vice President Daughter of
William Dillard

James E. Darr, Jr. 53 Senior Vice President; None
Secretary and General
Counsel

David M. Doub 49 Vice President None

John A. Franzke 64 Vice President None

James I. Freeman 46 Director; Senior Vice None
President; Chief Financial
Officer

Randal L. Hankins 45 Vice President None

T. R. Gastman 66 Vice President None

Bernard Goldstein 63 Vice President None

Roy J. Grimes 58 Vice President None

Harry D. Passow 56 Vice President None

ITEM 2. PROPERTIES.

All of the Registrant's stores are owned or leased from a
wholly-owned subsidiary or from third parties. The
Registrant's third-party store leases typically provide for
rental payments based upon a percentage of net sales with a
guaranteed minimum annual rent, while the lease terms between
the Registrant and its wholly-owned subsidiary vary. In
general, the Company pays the cost of insurance, maintenance
and any increase in real estate taxes related to these leases.
At fiscal year end there were 238 stores in operation with
gross square footage of 37,300,000. The Company owned or
leased from a wholly-owned subsidiary a total of 173 stores
with 27,400,000 square feet. The Company leased 65 stores
from third parties which totalled 9,900,000 square feet. For
additional information with respect to the Registrant's
properties and leases, reference is made to information
contained on page 19 under the heading "Dillard's Locations,"
and Notes 4, 9 and 10, "Notes to Consolidated Financial
Statements," on pages 35, 37 and 38 of the Report, which
information is incorporated herein by reference.

ITEM 3. LEGAL PROCEEDINGS.

The Company has no material legal proceedings pending against it.

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.

With respect to the market for the Company's common stock,
market prices, and dividends, reference is made to information
contained page 40 of the Report, which information is
incorporated herein by reference. As of March 29, 1996, there
were 6,638 record holders of the Company's Class A Common
Stock and 9 record holders of the Company's Class B Common
Stock.

ITEM 6. SELECTED FINANCIAL DATA.

Reference is made to information under the heading "Table of
Selected Financial Data" on pages 22 and 23 of the Report,
which information is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition
and Results of Operation" on pages 24 through 27 of the
Report, which information is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements and notes thereto
included on pages 28 through 39 of the Report are incorporated
herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

A. Directors of the Registrant.

Information regarding directors of the Registrant is
incorporated herein by reference to the information on
pages 4 through 6 under the heading "Nominees for
Election as Directors" and page 10 under the heading
"Section 16(a) Reporting Delinquencies" in the Proxy
Statement.

B. Executive Officers of the Registrant.

Information regarding executive officers of the
Registrant is incorporated herein by reference to Item 1
of this report under the heading "Executive Officers of
the Registrant." Reference additionally is made to the
information under the heading "Section 16(a) Reporting
Delinquencies" on page 10 in the Proxy Statement, which
information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

Information regarding executive compensation and compensation
of directors is incorporated herein by reference to the
information beginning on page 6 under the heading
"Compensation of Directors and Executive Officers" and
concluding on page 8 under the heading "Compensation Committee
Interlocks and Insider Participation" in the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

Information regarding security ownership of certain beneficial
owners and management is incorporated herein by reference to
the information on page 3 under the heading "Principal Holders
of Voting Securities" and page 4 under the heading "Nominees
for Election as Directors" and continuing through footnote 11
on page 6 in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information regarding certain relationships and related
transactions is incorporated herein by reference to the
information on page 10 under the heading "Certain
Relationships and Transactions" in the Proxy Statement and to
the information regarding Mr. Davis on page 8 under the
heading "Compensation Committee Interlocks and Insider
Participation" in the Proxy Statement.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.

(a)(1) Financial Statements

The following consolidated financial statements of the Registrant
and its consolidated subsidiaries included in the Report are
incorporated herein by reference in Item 8:

Consolidated Balance Sheets - February 3, 1996 and January 28, 1995
Consolidated Statements of Income - Fiscal years ended February 3, 1996,
January 28, 1995 and January 29, 1994
Consolidated Statements of Stockholders' Equity - Fiscal years ended
February 3, 1996, January 28, 1995 and January 29, 1994
Consolidated Statements of Cash Flows - Fiscal years ended
February 3, 1996, January 28, 1995 and January 29, 1994
Notes to Consolidated Financial Statements - Fiscal years ended
February 3, 1996, January 28, 1995 and January 29, 1994

(a)(2) Financial Statement Schedules

The following consolidated financial statement schedule of the
Registrant and its consolidated subsidiaries is filed pursuant to
Item 14(d) (this schedule appears immediately following the
signature page):

Schedule II - Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable, and therefore have been omitted.

(a)(3) Exhibits and Management Compensatory Plans
Exhibits

The following exhibits are filed pursuant to Item 14(c):

Number Description

* 3(a) Restated Certificate of Incorporation (Exhibit 3 to Form
10-Q for the quarter ended August 1, 1992 in 1-6140)
* 3(b) By-Laws as currently in effect. (Exhibit 3(b) to Form 10-
K for the fiscal year ended January 30, 1993 in 1-6140)
* 4(a) Indenture between the Registrant and Chemical Bank,
Trustee, dated as of October 1, 1985 (Exhibit (4) in 2-
85556)
* 4(b) Indenture between the Registrant and Chemical Bank,
Trustee, dated as of October 1, 1986 (Exhibit (4) in 33-
8859)
* 4(c) Indenture between Registrant and Chemical Bank, Trustee,
dated as of April 15, 1987 (Exhibit 4.3 in 33-13534)
* 4(d) Indenture between Registrant and Chemical Bank, Trustee,
dated as of May 15, 1988, as supplemented (Exhibit 4 in
33-21671, Exhibit 4.2 in 33-25114 and Exhibit 4(c) to
Current Report on Form 8-K dated September 26, 1990 in 1-
6140)
* 4(e) Indenture between Dillard Investment Co., Inc. and
Chemical Bank, Trustee, dated as of April 15, 1987, as
supplemented (Exhibit 4.1 in 33-13535 and Exhibit 4.2 in
33-25113)
*10(a) Retirement Contract of William Dillard dated October 17,
1990 (Exhibit (10) to Form 10-K for the fiscal year ended
February 2, 1991 in 1-6140)
*10(b) 1990 Incentive and Nonqualified Stock Option Plan
(Exhibit 10(b) to Form 10-K for the fiscal year ended
January 30, 1993 in 1-6140)
*10(c) Corporate Officers Non-Qualified Pension Plan (Exhibit
10(c) to Form 10-K for the fiscal year ended January 29,
1994 in 1-6140)
*10(d) Senior Management Cash Bonus Plan (Exhibit 10(d) to Form
10-K for the fiscal year ended January 28, 1995 in 1-6140)
11 Statement Re: Computation of Per Share Earnings
12 Statement Re: Computation of Ratio of Earnings to Fixed Charges
13 Incorporated portions of the Annual Stockholders Report
for the fiscal year ended February 3, 1996
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
____________
* Incorporated herein by reference as indicated.

Management Compensatory Plans

Listed below are the management contracts and compensatory plans
which are required to be filed as exhibits pursuant to Item 14(c):

Retirement Contract of William Dillard dated October 17, 1990
1990 Incentive and Nonqualified Stock Option Plan
Corporate Officers Non-Qualified Pension Plan
Senior Management Cash Bonus Plan

(b) Reports on Form 8-K filed during the fourth quarter:

None

(c) Exhibits

See the response to Item 14(a)(3).

(d) Financial statement schedules

See the response to Item 14(a)(2).

SIGNATURES

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.

Dillard Department Stores, Inc.
Registrant

/s/ James I. Freeman

Date May 2,1996 James I. Freeman, Senior Vice
President and Chief Financial Officer
(Principal Financial & Accounting
Officer)

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

/s/William Dillard /s/Drue Corbusier
William Dillard Drue Corbusier
Chairman and Chief Executive Vice President and Director
Officer (Principal Executive
Officer)

/s/Calvin N. Clyde, Jr. /s/Robert C. Connor
Calvin N. Clyde, Jr. Robert C. Connor
Director Director

/s/Will D. Davis /s/Alex Dillard
Will D. Davis Alex Dillard
Director Executive Vice President
and Director

/s/Mike Dillard /s/William Dillard, II
Mike Dillard William Dillard, II
Executive Vice President and President and Chief Operating
Director Officer and Director

/s/James I. Freeman /s/William H. Sutton
James I. Freeman William H. Sutton
Senior Vice President and Chief Director
Financial Officer and Director

/s/John Paul Hammerschmid t /s/William B. Harrison, Jr.
John Paul Hammerschmidt William B. Harrison, Jr.
Director Director

/s/J. M. Hessels /s/John H. Johnson
J. M. Hessels John H. Johnson
Director Director

/s/E. Ray Kemp
E. Ray Kemp
Director

Date May 2, 1996

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Dillard Department Stores, Inc.
Little Rock, Arkansas

We have audited the consolidated financial statements of Dillard Department
Stores, Inc. and subsidiaries as of February 3, 1996 and January 28, 1995,
and for each of the three years in the period ended February 3, 1996, and
have issued our report thereon dated March 4, 1996; such consolidated
financial statements and report (which report includes an explanatory
paragraph relating to a change in accounting for the impairment of long-lived
assets and for long-lived assets to be disposed of) are included in your 1995
Annual Report to Stockholders and are incorporated herein by reference.
Our audits also included the consolidated financial statement schedule
of Dillard Department Stores, Inc. and subsidiaries, listed in Item 14. This
consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as whole, presents fairly in all material respects the information set
forth therein.

DELOITTE & TOUCHE LLP

New York, New York
March 4, 1996

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

DILLARD DEPARTMENT STORES, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
COL. A COL. B COL. C COL.D COL. E COL. F

ADDITIONS
BALANCE CHARGED TO CHARGED TO BALANCE
AT BEGINNING COST AND OTHER ACCOUNTS DEDUCTIONS - AT END
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE OF PERIOD

Allowance for losses
on accounts receivable:

Year ended
February 3, 1996: $15,307 52,522 708 (1) 49,009 (2) $19,528

Year ended
January 28, 1995: $15,214 44,922 44,829 (2) $15,307

Year ended
January 29, 1994: $15,790 43,036 43,612 (2) $15,214

(1) Represents the allowance for losses on accounts acquired.

(2) Accounts written off and charged to allowance for losses on
accounts receivable (net of recoveries).

EXHIBIT INDEX

Number Description

* 3(a) Restated Certificate of Incorporation (Exhibit 3
to Form 10-Q for the quarter ended August 1, 1992
in 1-6140)
* 3(b) By-Laws as currently in effect (Exhibit 3(b) to
Form 10-K for the fiscal year ended January 30,
1993, in 1-6140)
* 4(a) Indenture between the Registrant and Chemical
Bank, Trustee, dated as of October 1, 1985
(Exhibit (4) in 2-85556)
* 4(b) Indenture between the Registrant and Chemical
Bank, Trustee, dated as of October 1, 1986
(Exhibit (4) in 33-8859)
* 4(c) Indenture between Registrant and Chemical Bank,
Trustee, dated as of April 15, 1987 (Exhibit 4.3
in 33-13534)
* 4(d) Indenture between Registrant and Chemical Bank,
Trustee, dated as of May 15, 1988, as supplemented
(Exhibit 4 in 33-21671, Exhibit 4.2 in 33-25114
and Exhibit 4(c) to Current Report on Form 8-K
dated September 26, 1990 in 1-6140)
* 4(e) Indenture between Dillard Investment Co., Inc. and
Chemical Bank, Trustee, dated as of April 15,
1987, as supplemented (Exhibit 4.1 in 33-13535 and
Exhibit 4.2 in 33-25113)
*10(a) Retirement Contract of William Dillard dated
October 17, 1990 (Exhibit (10) to Form 10-K for
the fiscal year ended February 2, 1991 in 1-6140)
*10(b) 1990 Incentive and Nonqualified Stock Option Plan
(Exhibit 10(b) to Form 10-K for the fiscal year
ended January 30, 1993 in 1-6140)
*10(c) Corporate Officers Non-Qualified Pension Plan
(Exhibit 10(c) to Form 10-K for the fiscal year
ended January 29, 1994 in 1-6140)
*10(d) Senior Management Cash Bonus Plan (Exhibit 10(d)
to Form 10-K for the fiscal year ended January 28,
1995 in 1-6140)
11 Statement Re: Computation of Per Share Earnings
12 Statement Re: Computation of Ratio of Earnings to
Fixed Charges
13 Incorporated portions of the Annual Stockholders
Report for the fiscal year ended February 3, 1996
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
__________________
* Incorporated herein by reference as indicated.