Abercrombie & Fitch 2010 Annual Report Download - page 15
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Table of Contents
• address the different operational characteristics present in each country to which we expand, including employment and labor,
transportation, logistics, real estate, lease provisions and local reporting or legal requirements;
• negotiate acceptable lease terms, in some cases in locations in which the relative rights and obligations of landlords and
tenants differ significantly from the customs and practices in the United States;
• hire, train and retain competent store personnel;
• gain and retain acceptance from foreign customers;
• manage inventory effectively to meet the needs of new and existing stores on a timely basis;
• expand infrastructure to accommodate growth;
• foster current relationships and develop new relationships with vendors that are capable of supplying a greater volume of
merchandise;
• generate sufficient operating cash flows or secure adequate capital on commercially reasonable terms to fund our expansion
plan;
• manage foreign currency exchange risks effectively; and
• achieve acceptable operating margins from new stores.
Failure to implement our international expansion plan consistent with our internal expectations, whether as a result of one or
more of the factors listed above or other factors, would adversely affect our ability to achieve the roadmap objectives that we have
established for ourselves.
Our Direct-to-Consumer Sales are Subject to Numerous Risks that Could Adversely Impact Sales.
We sell merchandise over the Internet through our websites: www.abercrombie.com; www.abercrombiekids.com;
www.hollisterco.com; and www.gillyhicks.com. Our Internet operations are subject to numerous risks, including:
• reliance on third-party computer hardware/software providers;
• rapid technological change and the implementation of new systems and platforms;
• diversions of sales from our stores;
• liability for online content;
• violations of state, federal or international laws, including those relating to online privacy;
• credit card fraud;
• the failure of the computer systems that operate our websites and their related support systems, including computer viruses;
• telecommunication failures and electronic break-ins and similar disruptions; and
• disruption of Internet service, whether for technical reasons or as a result of state-sponsored censorship.
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