Build-A-Bear Workshop 2009 Annual Report Download - page 21

BUILD-A-BEAR WORKSHOP, INC. 2009 FORM 10-K
affect our revenue; obtain a license from the holder of the
intellectual property right alleged to have been infringed,
which license may not be available on reasonable terms, if at
all; and redesign or, in the case of trademark claims, rename
our products to avoid infringing the intellectual property rights
of third parties, which may not be possible and time-
consuming if it is possible to do so.
Despite our efforts to protect our intellectual property
rights, intellectual property laws afford us only limited
protection. A third party could copy or otherwise obtain
information from us without authorization. Accordingly, we
may not be able to prevent misappropriation of our
intellectual property or to deter others from developing similar
products or services. Further, monitoring the unauthorized use
of our intellectual property is difficult. Litigation has been and
may continue to be necessary to enforce our intellectual
property rights or to determine the validity and scope of the
proprietary rights of others. Litigation of this type could result
in substantial costs and diversion of resources, may result in
counterclaims or other claims against us and could
significantly harm our results of operations. In addition, the
laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the United States.
We also conduct business in foreign countries to the
extent our merchandise is manufactured or sold outside the
United States and we have opened stores outside the United
States either directly or indirectly through franchisees. We
filed, obtained or plan to file for registration of marks in
foreign countries to the degree necessary to protect these
marks, although our efforts may not be successful and further
there may be restrictions on the use of these marks in some
jurisdictions.
SEGMENTS AND GEOGRAPHIC AREAS
We conduct our operations through three reportable segments
consisting of retail, international franchising, and licensing
and entertainment. The retail segment includes the operating
activities of company-owned stores in the United States,
Canada, the United Kingdom, Ireland and France, and
other retail delivery operations, including our web-store and
non-traditional store locations such as tourist venues and
ballpark stores. The international franchising segment includes
the licensing activities of our franchise agreements with
locations in Asia, Australia, Africa and Europe, outside of
the United Kingdom, Ireland and France. The licensing and
entertainment segment has been established to market the
naming and branding rights of our intellectual properties for
third party use.
Our reportable segments are primarily determined by the
types of products and services that they offer. Each reportable
segment may operate in many geographic areas. See the
financial statements included elsewhere in this Annual Report
on Form 10-K for further discussion and financial information
related to our segments and the geographic areas in which
we operate.
AVAILABILITY OF INFORMATION
We make certain filings with the SEC, including our Annual
Report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and all amendments and exhibits to
those reports, available free of charge in the Investor Relations
section of our corporate website, http://ir.buildabear.com, as
soon as reasonably practicable after they are filed with the
SEC. The filings are also available through the SEC at the
SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549 or by calling 1-800-SEC-0330.
Also, these filings are available on the internet at
http://www.sec.gov. Our Annual Reports to shareholders,
press releases and recent analyst presentations are also
available on our website, free of charge, in the Investor
Relations section or by writing to the Investor Relations
department at World Bearquarters, 1954 Innerbelt Business
Center Dr., St. Louis, MO 63114.
ITEM 1A. RISK FACTORS
We operate in a changing environment that involves
numerous known and unknown risks and uncertainties that
could materially affect our operations. The risks, uncertainties
and other factors set forth below may cause our actual results,
performances or achievements to be materially different from
those expressed or implied by our forward-looking statements.
If any of these risks or events occur, our business, financial
condition or results of operations may be adversely affected.
RISKS RELATED TO OUR BUSINESS
A continued decline in general global economic conditions
could lead to disproportionately reduced consumer demand
for our products, which represent relatively discretionary
spending, and have an adverse effect on our liquidity and
profitability.
Since purchases of our merchandise are dependent upon
discretionary spending by our guests, our financial
performance is sensitive to changes in overall economic
conditions that affect consumer spending. Consumer spending
habits are affected by, among other things, prevailing
economic conditions, levels of employment, salaries and
wage rates, consumer confidence and consumer perception
of economic conditions. A continued slowdown in the United
States, Canadian or European economies or uncertainty as
to the economic outlook could reduce discretionary spending
or cause a shift in consumer discretionary spending to other
products. Any of these factors would likely cause us to delay
or slow our expansion plans, result in lower net sales and
could also result in excess inventories, which could, in turn,
lead to increased merchandise markdowns and related costs
associated with higher levels of inventory and adversely affect
our liquidity and profitability.
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