Abercrombie & Fitch 2009 Annual Report Download - page 8

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• ability to hire, train and retain qualified associates;
• ability to develop innovative, high-quality new merchandise in response to changing fashion trends;
• availability and market prices of key raw materials;
• interruption of the flow of merchandise from key vendors and manufacturers and the flow of
merchandise to and from distributors;
• ability of manufacturers to comply with applicable laws and regulations and ethical business practices;
• availability of suitable store locations under appropriate terms;
• currency and exchange risks and changes in existing or potential duties, tariffs or quotas;
• effects of political and economic events and conditions domestically, and in foreign jurisdictions in
which the Company operates, including, but not limited to, acts of terrorism or war;
• unseasonable weather conditions affecting consumer preferences;
• disruptive weather conditions affecting consumers’ ability to shop;
• effect of litigation or adversary proceeding exposure potentially exceeding expectations; and
• potential disruption of the Company’s business due to the occurrence of, or fear of, a health pandemic.
The following sets forth a description of certain risk factors that the Company believes may be relevant to
an understanding of the Company and its business. These risk factors, in addition to the factors set forth
above, could cause actual results to differ materially from those expressed or implied in any of the Company’s
forward-looking statements.
General Economic and Financial Conditions Could Have a Material Adverse Effect on the Company’s
Business, Results of Operations and Liquidity.
Consumer purchases of discretionary items, including the Company’s merchandise, generally decline
during recessionary periods and other periods where disposable income is adversely affected. The Company’s
performance is subject to factors that affect worldwide economic conditions including employment, con-
sumer debt, reductions in net worth based on declines in the financial, residential real estate and mortgage
markets, taxation, fuel and energy prices, interest rates, consumer confidence, value of the U.S. dollar versus
foreign currencies and other macroeconomic factors. Over the past several years, the combination of these
factors has caused consumer spending to deteriorate significantly and may cause levels of spending to remain
depressed for the foreseeable future. These factors may cause consumers to purchase products from lower
priced competitors or to defer purchases of apparel and personal care products altogether.
The economic uncertainty could have a material effect on the Company’s results of operations and its
liquidity and capital resources. It could also impact the Company’s ability to fund its growth and/or result in
the Company becoming reliant on external financing, the availability of which may be uncertain.
In addition, the economic environment may exacerbate some of the risks noted below, including
consumer demand, strain on available resources, international growth strategy, store growth, interruption of
the flow of merchandise from key vendors and manufacturers, and foreign exchange rate fluctuations. The
risks could be exacerbated individually or collectively.
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