Abercrombie & Fitch 2012 Annual Report Download - page 84

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Table of Contents
• interruption in the flow of merchandise from our key vendors and international manufacturers could disrupt our supply chain, which could result in
lost sales and could increase our costs;
• 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 two third-party distribution centers 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, pandemic
disease and other unexpected events, any of which could result in an interruption to our business and adversely affect our operating results;
• our litigation exposure could have 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;
• 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 Amended and Restated Credit Agreement and our Term Loan Agreement include financial and other covenants that impose
restrictions on our financial and business operations;
• our operations may be affected by regulatory changes related to climate change and greenhouse gas emissions; and
• compliance with changing regulations and standards for accounting, corporate governance and public disclosure could adversely affect our business,
results of operations and reported financial results.
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