Express 2014 Annual Report Download - page 17

centers in which our stores are located, the closing of anchor stores important to our business, a decline in
popularity of other stores in the malls or other shopping centers in which our stores are located, or a deterioration
in the financial condition of shopping center operators or developers which could, for example, limit their ability
to finance tenant improvements for us and other retailers. A reduction in consumer traffic as a result of these or
any other factors could have a material adverse effect on us.
Our business depends in part on a strong brand image, and if we are not able to maintain and enhance our
brand, particularly in new markets where we have limited brand recognition, we may be unable to attract
sufficient numbers of customers to our stores or sell sufficient quantities of our products.
Our ability to maintain our reputation is critical to our brand image. Our reputation could be jeopardized if we
fail to maintain high standards for merchandise quality and integrity, fail to maintain high ethical, social, and
environmental standards for all of our operations and activities, or we fail to appropriately respond to concerns
associated with any of the foregoing or any other concerns from our customers. Failure to comply with local laws
and regulations, to maintain an effective system of internal controls, or to provide accurate and timely financial
statement information could also hurt our reputation. Damage to our reputation or loss of consumer confidence
for any of these reasons may reduce demand for our products and have a material adverse effect on our business,
financial condition, and results of operations, as well as require additional resources to rebuild our reputation.
If we are unable to successfully develop and maintain a relevant and reliable omni-channel experience for our
customers, our financial performance and brand image could be adversely affected.
Our business continues to evolve from a largely brick-and-mortar retail business to an omni-channel retail
business. While historically we interacted with our customers largely through our in-store experience,
increasingly we interact with our customers across a variety of different channels, including in-store, online at
www.express.com, mobile technologies, and social media. Our customers are increasingly using tablets and
mobile phones to make purchases online and to help them in making purchasing decisions when in our stores.
Our customers also engage with us online by providing feedback and public commentary about all aspects of our
business. Omni-channel retailing is rapidly evolving and our success depends on our ability to anticipate and
implement innovations in customer experience and logistics in order to appeal to customers who increasingly
rely on multiple channels to meet their shopping needs. If for any reason we are unable to implement our omni-
channel initiatives, provide a convenient and consistent experience for our customers across all channels, or
provide our customers the products they want, when and where they want them, then our financial performance
and brand image could be adversely affected.
We rely significantly on information systems and any failure, inadequacy, interruption, or security failure of
those systems could harm our ability to effectively operate our business, cause a decrease in our net sales,
increase our expenses, and harm our reputation.
Our ability to effectively manage and maintain our inventory, ship products to our stores and our customers on a
timely basis, communicate with our customers, conduct customer transactions, and otherwise operate our
business depends significantly on our information systems. The failure of our information systems to operate
effectively, problems with transitioning to upgraded or replacement systems, or a breach in security of these
systems could adversely impact our merchandise distribution, transaction processing, financial accounting and
reporting, the efficiency of our operations, and our ability to properly forecast earnings and cash requirements.
We could be required to make significant additional expenditures to remediate any such failure, problem, or
breach, and may be subject to legal claims as a result of such failure. Furthermore, to effectively carry out our
growth plans, we will need to continue to improve and expand our operational and financial systems, transaction
processing, internal controls, and business processes. In doing so, we could encounter implementation issues and
incur substantial additional expenses. Such events may have a material adverse effect on us.
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