Advance Auto Parts 2008 Annual Report Download - page 26

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New Store Openings
We have increased our store count significantly from 814 stores at the end of fiscal 1997 to 3,368 stores at
January 3, 2009. We intend to continue to increase the number of our stores and expand the markets we serve as part
of our growth strategy, primarily by opening new stores. We may also grow our business through strategic
acquisitions. We do not know whether the implementation of our growth strategy will be successful. The actual
number of new stores to be opened and their success will depend on a number of factors, including, among other
things:
• the availability of potential store locations;
• the negotiation of acceptable lease or purchase terms for new locations;
• the availability of financial resources, including access to capital at cost-effective interest rates; and
• our ability to manage the expansion and hire, train and retain qualified sales associates.
We are unsure whether we will be able to open and operate new stores on a timely or sufficiently profitable
basis, or that opening new stores in markets we already serve will not harm existing store profitability or comparable
store sales. The newly opened and existing stores' profitability will depend on the competition we face as well as our
ability to properly merchandise, market and price the products desired by customers in these markets.
Acquisitions, Investments or Strategic Alliances
We may acquire stores or businesses from, make investments in, or enter into strategic alliances with companies
that have stores or distribution networks in our current markets or in areas into which we intend to expand our
presence. Any future acquisitions, investments, strategic alliances or related efforts will be accompanied by risks,
including but not limited to:
• the difficulty of identifying appropriate strategic partners or acquisition candidates;
• securing adequate financing on cost-effective terms for acquisition or post-acquisition expenditures;
• the potential disruption to our ongoing business and diversion of our management's attention;
• inability or failure to discover liabilities prior to completion of an acquisition, including the assumption of
legal liabilities;
• the difficulty of assimilating and integrating the operations of the respective entities to realize anticipated
economic, operational or other favorable benefits;
• the inability to maintain uniform standards, controls, procedures and policies;
• inability or failure to retain key personnel from the acquired business; and
• the impairment of relationships with team members and customers as a result of changes in management.
We are unsure whether we will be successful in overcoming these risks or any other problems encountered with
any acquisitions, investments, strategic alliances or related efforts. If we fail to successfully open and operate new
stores or make strategic acquisitions or alliances, then our business, financial condition, results of operations and
cash flows may be negatively impacted.
Because we are involved in litigation from time to time, and are subject to numerous laws and governmental
regulations, we could incur substantial judgments, fines, legal fees and other costs.
We are sometimes the subject of complaints or litigation from customers, employees or other third parties for
various actions. From time to time, we are involved in litigation involving claims related to, among other things,
breach of contract, tortious conduct, employment discrimination, payment of wages, asbestos exposure, real estate,
and product defects. The damages sought against us in some of these litigation proceedings are substantial. Although
we maintain liability insurance for some litigation claims, if one or more of the claims were to greatly exceed our
insurance coverage limits or if our insurance policies do not cover a claim, this could have a material adverse affect
on our business, financial condition, results of operations and cash flows.