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

For the fiscal year ended February 1, 1997

OR

[ ] 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 1-6140

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 31, 1997:
$3,339,189,882

Indicate the number of shares outstanding of each of the
Registrant's classes of common stock as of March 31, 1997:
Class A Common Stock, $.01 par value 108,293,001
Class B Common Stock, $.01 par value 4,016,929

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Stockholders Report for the fiscal year
ended February 1, 1997 (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 17, 1997 (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
12, under the heading "Dillard's Locations," page 14 under the
headings "Net Sales," "Net Income," "Total Assets" and "Number
of Employees - Average," and page 32 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 82 Chairman of the Board; Father of William
Chief Executive Officer Dillard, II, Drue
Corbusier, Alex
Dillard and Mike
Dillard

William Dillard, II 52 Director; President Son of
& Chief Operating Officer William Dillard

Alex Dillard 47 Director; Executive Son of
Vice President William Dillard

Mike Dillard 45 Director; Executive Son of
Vice President William Dillard

H. Gene Baker 58 Vice President None

G. Kent Burnett 52 Vice President None

Drue Corbusier 50 Director; Vice President Daughter of
William Dillard

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

David M. Doub 50 Vice President None

John A. Franzke 65 Vice President None

James I. Freeman 47 Director; Senior Vice None
President; Chief Financial
Officer

Randal L. Hankins 46 Vice President None

T. R. Gastman 67 Vice President None

Bernard Goldstein 64 Vice President None

Roy J. Grimes 59 Vice President None

Harry D. Passow 57 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 250 stores in operation with
gross square footage of 40,000,000. The Company owned or
leased from a wholly-owned subsidiary a total of 186 stores
with 30,100,000 square feet. The Company leased 64 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 12 under the heading "Dillard's Locations,"
and Notes 4, 9 and 10, "Notes to Consolidated Financial
Statements," on pages 27, 30 and 31 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 32 of the Report, which information is
incorporated herein by reference. As of March 31, 1997, there
were 6,113 record holders of the Company's Class A Common
Stock and 10 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 14 and 15 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 16 through 19 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 20 through 31 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) Beneficial Ownership Reporting
Compliance" 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) Beneficial
Ownership Reporting Compliance" 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 5 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 1, 1997 and February 3, 1996
Consolidated Statements of Income - Fiscal years ended
February 1, 1997, February 3, 1996 and January 28, 1995
Consolidated Statements of Stockholders' Equity - Fiscal years ended
February 1, 1997, February 3, 1996 and January 28, 1995
Consolidated Statements of Cash Flows - Fiscal years ended
February 1, 1997, February 3, 1996 and January 28, 1995
Notes to Consolidated Financial Statements - Fiscal years ended
February 1, 1997, February 3, 1996 and January 28, 1995

(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 March 8, 1997
*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 1, 1997
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 March 8, 1997
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

April 25, 1997 /s/ James I. Freeman
Date 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 Hammerschmidt /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
April 25, 1997
Date

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 1, 1997 and
February 3, 1996, and for each of the three years in the period
ended February 1, 1997, and have issued our report thereon dated
February 25, 1997; 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 1996
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
February 25, 1997

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 1, 1997: $19,528 66,629 23 (1) 62,011 (2) $24,169

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

(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 March 8,1997
*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 1, 1997
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
__________________
* Incorporated herein by reference as indicated.