Abercrombie & Fitch 2010 Annual Report Download - page 11
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Table of Contents
• we do not own or operate any manufacturing facilities and, therefore, depend upon independent third parties for the
manufacture of all our merchandise;
• our reliance on two distribution centers domestically and one third-party distribution center internationally makes us
susceptible to disruptions or adverse conditions affecting our distribution centers;
• our reliance on third parties to deliver merchandise from our distribution centers to our stores and direct-to-consumer
customers could result in disruptions to our business;
• we may be exposed to risks and costs associated with credit card fraud and identity theft that would cause us to incur
unexpected expenses and loss of revenues;
• modifications and/or upgrades to our information technology systems may disrupt our operations;
• our facilities, systems and stores as well as the facilities and systems of our vendors and manufacturers, are vulnerable to
natural disasters and other unexpected events, any of which could result in an interruption in our business and adversely affect
our operating results;
• our litigation exposure could exceed expectations, having a material adverse effect on our financial condition and results of
operations;
• our inability or failure to adequately protect our trademarks could have a negative impact on our brand image and limit our
ability to penetrate new markets;
• fluctuations in our tax obligations and effective tax rate may result in volatility in our operating results;
• the effects of war or acts of terrorism could have a material adverse effect on our operating results and financial condition;
• our inability to obtain commercial insurance at acceptable prices or our failure to adequately reserve for self-insured exposures
might increase our expenses and adversely impact our financial results;
• reduced operating results and cash flows at the store level may cause us to incur impairment charges;
• we are subject to customs, advertising, consumer protection, privacy, zoning and occupancy and labor and employment laws
that could require us to modify our current business practices, incur increased costs or harm our reputation if we do not
comply;
• changes in the regulatory or compliance landscape could adversely affect our business and results of operations;
• our unsecured credit agreement includes financial and other covenants that impose restrictions on our financial and business
operations; and
• our operations may be affected by regulatory changes related to climate change and greenhouse gas emissions.
The following sets forth a description of certain risk factors that we believe may be relevant to an understanding of our business.
These risk factors could cause actual results to differ materially from those expressed or implied in any of our forward-looking
statements.
8