Abercrombie & Fitch 2010 Annual Report Download - page 8

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Table of Contents
and the registries of countries where stores are located or likely to be located in the future. These trademarks are either registered, or
the Company has applications for registration pending, with the registries of many of the foreign countries in which the manufacturers
of the Company's products are located. The Company has also registered, or has applied to register, certain other trademarks in the
U.S. and around the world. The Company believes that its products are identified by its trademarks and, therefore, its trademarks are
of significant value. Each registered trademark has a duration of ten to 20 years, depending on the date it was registered, and the
country in which it is registered, and is subject to an indefinite number of renewals for a like period upon continued use and
appropriate application. The Company intends to continue using its core trademarks and to renew each of its registered trademarks that
remain in use.
Financial Information about Segments.
The Company determines its operating segments on the same basis that it uses to evaluate performance internally. The Company
believes its operating segments may be aggregated and reported as one reportable segment for financial reporting purposes because
they are similar in each of the following areas: class of consumer, economic characteristics, nature of products, nature of production
processes, and distribution methods. Refer to Note 1, "Basis of Presentation" of the Notes to Consolidated Financial Statements
included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for
further discussion, including the break-out of geographic information for net sales and long-lived assets.
Other Information.
Additional information about the Company's business, including its revenues and profits for the last three fiscal years and gross
square footage of stores, is set forth under "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" of this Annual Report on Form 10-K.
COMPETITION.
The sale of apparel and personal care products through "brick-and-mortar" stores and direct-to-consumer channels is a highly
competitive business with numerous participants, including individual and chain fashion specialty stores, as well as regional and
national department stores. As the Company continues expanding internationally, it also faces competition in local markets from
established chains, as well as local specialty stores. Brand recognition, fashion, price, service, store location, selection and quality are
the principal competitive factors in retail store and direct-to-consumer sales.
The competitive challenges facing the Company include anticipating and quickly responding to changing fashion trends; and
maintaining the aspirational positioning of its brands so it can sustain its premium pricing position. Furthermore, the Company faces
additional competitive challenges as many retailers continue promotional activities regardless of economic conditions. In response to
these conditions, the Company has increased its promotional activity while continuing to focus on preserving the value of its brands.
5