Abercrombie & Fitch 2010 Annual Report Download - page 23

Table of Contents
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 retail stores, corporate offices, distribution centers, infrastructure projects and direct-to-consumer operations, as well as the
operations of our vendors and manufacturers, are vulnerable to damage from earthquakes, tornadoes, hurricanes, fires, floods, power
losses, telecommunications failures, hardware and software failures, computer viruses and similar events. If any of these events result
in damage to our facilities, systems or stores, or the facilities or systems of our vendors or manufacturers, we may experience
interruptions in our business until the damage is repaired, resulting in the potential loss of customers and revenues. In addition, we
may incur costs in repairing any damage which exceeds our applicable insurance coverage.
There is great uncertainty related to the earthquakes and the status of nuclear power plants in Japan. A continued interruption in
business in Japan could have an adverse impact on our financial position or results of operations.
Our Litigation Exposure Could Exceed Expectations, Having a Material Adverse Effect on Our Financial Condition and
Results of Operations.
We are involved, from time-to-time, in litigation incidental to our business, such as litigation regarding overtime compensation
and other employment or wage and hour related matters. Management is unable to assess the potential exposure of the aforesaid
matters. Our current exposure could change in the event of the discovery of damaging facts with respect to legal matters pending
against us or determinations by judges, juries or other finders of fact that are not in accordance with management's evaluation of the
claims. Should management's evaluation prove incorrect, our exposure could greatly exceed expectations and have a material adverse
effect on our financial condition, results of operations or cash flows.
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.
We believe our trademarks, Abercrombie & Fitch®, abercrombie®, Hollister Co.®, Gilly Hicks®, Gilly Hicks Sydney® and the
"Moose," "Seagull" and "Koala" logos, are an essential element of our strategy. We have obtained or applied for federal registration of
these trademarks with the U.S. Patent and Trademark Office and the registries of countries where stores are located or likely to be
located in the future. In addition, we own registrations and pending applications for other trademarks in the U.S. and have applied for
or obtained registrations from the registries in many foreign countries in which our stores or our manufacturers are located. There can
be no assurance that we will obtain registrations that have been applied for or that the registrations we obtain will prevent the imitation
of our products or infringement of our intellectual property rights by others. If any third party copies our products in a manner that
projects lesser quality or carries a negative connotation, our brand image could be materially adversely affected.
Because we have not yet registered all of our trademarks in all categories, or in all foreign countries in which we source or offer
our merchandise now, or may in the future, our international expansion and our merchandising of products using these marks could be
limited. For example, we cannot ensure that others will not try to block the manufacture, export or sale of our products as a violation
of their trademarks or other proprietary rights. The pending applications for international registration of various trademarks could be
challenged or rejected in those countries because third parties of whom we are not currently aware have
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