Advance Auto Parts 2008 Annual Report Download - page 25

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11
the uncertainty in the credit markets, it is possible that one or more of the banks that provides us with financing
under our credit facilities may fail to honor the terms of our existing credit facilities or be financially unable to
provide the unused credit. An inability to obtain sufficient financing at cost-effective rates could have a materially
adverse affect on our business, financial condition, results of operations and cash flows.
We depend on the services of many qualified Team Members, whom we may not be able to attract and retain.
Our success depends to a significant extent on the continued services and experience of our Team Members. At
March 2, 2009, we employed 47,582 Team Members. We may not be able to retain our current qualified Team
Members, or attract and retain additional qualified Team Members that may be needed in the future. Our ability to
maintain an adequate number of qualified Team Members is highly dependent on an attractive and competitive
compensation and benefits package. If we fail or are unable to maintain such a package, our customer service and
execution levels could suffer by reason of a declining quality of our workforce, which could adversely affect our
business, financial condition, results of operations and cash flows.
We may not be able to successfully implement our business strategy, including increasing comparable store
sales, enhancing our margins and increasing our return on invested capital, which could adversely affect our
business, financial condition, results of operations and cash flows.
We have implemented numerous initiatives as part of our business strategy, including four key turnaround
strategies introduced in 2008, to increase comparable store sales, enhance our margins and increase our return on
invested capital in order to increase our earnings and cash flow. If we are unable to implement these initiatives
efficiently and effectively, or if these initiatives are unsuccessful, our business, financial condition, results of
operations and cash flows could be adversely affected.
Successful implementation of our business strategy also depends on factors specific to the retail automotive
parts industry and numerous other factors that may be beyond our control. Adverse changes in the following factors
could undermine our business strategy and have a material adverse affect on our business, financial condition,
results of operations and cash flow:
• general economic conditions, including the current U.S. recession which could continue into the future, and
unfavorable conditions in our local markets, which could reduce our sales;
• the competitive environment in the automotive aftermarket parts and accessories retail sector that may
force us to reduce prices below our desired pricing level or increase promotional spending;
• changes in the automotive aftermarket parts manufacturing industry, such as manufacturer consolidation or
closures, which may disrupt or sever one or more of our supplier relationships and increase the cost of the
parts and accessories we sell;
• our ability to anticipate changes in consumer preferences and to meet customers’ needs for automotive
products (particularly parts availability) in a timely manner;
• our ability to stimulate DIY customer traffic as well as grow our Commercial business; and
• our continued ability to hire and retain qualified personnel, which depends in part on the types of recruiting,
training, compensation and benefit programs we adopt or maintain.
We will not be able to expand our business if our growth strategy is not successful, including the
availability of suitable locations for new store openings or the successful integration of any acquired
businesses, which could adversely affect our business, financial condition, results of operations and cash
flows.