Fitch Revises Nordstrom's Outlook to Stable; Affirms IDR at 'A-'

--Long-term Issuer Default Rating (IDR) at 'A-';

--Senior unsecured notes at 'A-';

--$500 million bank credit facility at 'A-';

--Short-term IDR at 'F2';

--Commercial paper at 'F2'.

Approximately $1.9 billion of debt is affected by these actions. The Rating Outlook has been revised to Stable from Positive.

The change in the Outlook follows the company's announcement of a $1 billion increase to its share repurchase program for a total authorization of $2.5 billion. About $750 million of the total authorization was completed during the third quarter of 2007 and the remainder is expected to be completed through the end of fiscal 2009.

Fitch anticipates that Nordstrom will fund the majority of the share repurchase program with debt, thereby weakening the company's credit metrics. The company is now targeting leverage, measured by total adjusted debt to operating EBITDAR, of 2 times (x) which Fitch views as a shift in financial policy. For the latest 12 months ended Nov. 3, 2007, Nordstrom's leverage was 1.64x and EBITDAR coverage of interest and rents was 12.58x. Fitch's ratings consider the more highly leveraged nature of the credit card business and have incorporated this risk by estimating the potential loss on the portfolio and combining it with the risks of the retail business.

The ratings continue to reflect Nordstrom's position as a luxury retailer, offering differentiated merchandise and a high level of customer service, as well as its manageable expansion program and heavy investments in technology. These factors are balanced against the competitive operating environment and the cyclical nature of upscale retailing which have resulted in a recent deceleration in same store sales trends.

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